Springfield Company Offers a Bonus Plan to Its Employees and the Amount

Springfield Company offers a bonus plan to its employees and the amount of the employee bonuses for the current year is estimated to be $32,500 to be paid during January of the following year.The journal entry on December 31 to record the bonuses is:

A) Debit Estimated Bonus Payable $32,500;credit Cash $32,500.
B) Debit Employee Bonus Expense $32,500;credit Bonus Payable $32,500.
C) No entry since the bonuses are not paid until January.
D) Debit Employee Bonus Expense $32,500;credit Prepaid Employee Bonus $32,500.
E) Debit Unearned Bonuses $32,500;credit Bonus Payable $32,500.

Correct Answer:

Verified

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