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Monty Corporation provides its officers with bonuses based on net income. For 2017, the bonuses total...

Monty Corporation provides its officers with bonuses based on net income. For 2017, the bonuses total $384,900 and are paid on February 15, 2018. Prepare Monty’s December 31, 2017, adjusting entry and the February 15, 2018, entry.

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Answer #1

Journal entry on 31st December 2017:

Bonus expense Account [Debit] $ 384900

Accrued Bonus Liability [Credit]                      $ 384900

[Bonus get accrued]

Journal entry on 15th February 2018:

Accrued Bonus Liability [Debit] $ 384900

Bank [Credit]                      $ 384900

[Bonus paid]

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