In regard to employee benefits, on October 20, 2X13, the CFO of Scare Crow PLC in London

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Question:

In regard to employee benefits, on October 20, 2X13, the CFO of Scare Crow PLC in London is committed to terminating Aunt Emma on December 31, 2X13 and will be offering her a benefit package of 100,000 British Pounds Sterling. Aunt Emma is qualified to retired from Scare Crow on December 31, 2X16. The proper treatment of this decision is

1. October 31, 2X13 statement: Debit termination expense for 100,000 British Pounds Sterling, Credit termination payable 100,000 British Pounds Sterling

2. December 31, 2X13 statement: Debit termination expense for 100,000 British Pounds Sterling, Credit termination payable 100,000 British Pounds Sterling

3. December 31, 2X16 statement: Debit termination expense for 100,000 British Pounds Sterling, Credit termination payable 100,000 British Pounds Sterling

4. No journal entry is required until Aunt Emma takes the termination cash out