Chapter 15, Problem 7SEB

ADJUSTING, CLOSING, AND REVERSING ENTRIES Prepare entries for (a), (b), and (c) listed below using two methods. First, prepare the entries without making a reversing entry. Second, prepare the entries with the use of a reversing entry. Use T-accounts to assist your analysis.

(a)    Wages paid during 20-1 are $20,080.

(b)    Wages earned but not paid (accrued) as of December 31, 20-1, are $280.

(c)    On January 3, 20-2, payroll of $840 is paid, which includes the $280 of wages earned but not paid in December.