Question

J. Sweet incorporated a marketing firm named J. Sweet & Associates Ltd. at the beginning of January 2020. JS (J. Sweet’s nickname) discovered that you are taking an accounting course and has asked you for assistance in preparing the financial information for the company’s bank. JS decided on January 31st for the end of their fiscal period, so you only need statements for the first month of operations. If you need to calculate any numbers please include these calculations in the narrative line for your journal entry. Journal entry narratives are recorded below the journal entry and include relevant information (including calculations) about the entry.

"Because of the success of the first few weeks, JS hired (and immediately put to work that day) an Administrative Assistant on Friday January 17th to organize the office. The Admin Assistant agreed to a bi-weekly (every two weeks) salary of $1,600, which is to be paid every second Friday with the first paycheque due on Friday, January 24. (The work week is Monday to Friday). "

What would be the dated journal entry and adjusted journal entry for this transaction? Would you record the transaction on the 17th as a payable and then again on the 24th to show decreased cash?

Answer 1

As the company's Fiscal period end on 31st Jan. There is no requirement for adjusting journal entry as on jan 24th because the adjusted journal entries need to be recorded at the last day of the end of the fiscal year.

There will be only one journal entry as on jan 24th for payment of salary through cheque. The journal entry be:

Salary Expenses A/c..................Debit $ 1600

To Bank A/c...............................Credit $ 1600

There will be adjusted journal entry as on jan 31st for the salary accrued till that date.