Pablo Management has five employees, each of whom earns $250 per day. They are paid on Fridays for work completed Monday through Friday of the same week. Near year-end, the five 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.
a. Prepare the December 31 year-end adjusting entry for wages expense.
b. Prepare the journal entry to record payment of the employees’ wages on Friday, January 4.