PittCo has a policy of paying salaries for contract labor on the 15th of the month following the labor services received. In December 2020, the company paid $15,000 in salaries for labor services received in November 2020. In addition, labor services received in December 2020 were $12,000 and will be paid by the company on January 15, 2021. What adjusting entry will PittCo record on December 31, 2020

Respuesta :

Answer and Explanation:

The adjusting entry is shown below:

As on December 2020

Salaries Expense            $12,000  

      Salaries Payable                   $12,000

(Being salary outstanding is recorded)

To record this, we debited the salaries expense as it increased the expenses and credited the salaries payable as it also increased the liabilities

Therefore this should be the adjusting entry passed