Pablo Management has four employees, each of whom earns $95 per day. They are paid on Fridays for work completed Monday through Friday of the same week. Near year-end, the four employees worked Monday, December 31, and Wednesday, Thursday, and Friday, January 2, 3, and 4. New Year’s Day (January 1) was an unpaid holiday.
Required:
a. Assuming that December 31, 2015, was a Monday, prepare the adjusting entry that would be recorded at the close of that day.
b. Assuming that January 4, 2016, was a Friday, prepare the journal entry that would be made to record payment of the employees’ wages.