Question

Why there is no journal entry?

Please explain to me, thanks so much

7. On December 28, at 9am, XYZ hires an emplovee named Frank, who begins working immediately. December 28 is a Monday. The work week is Monday through Friday. The next pay day is Friday, January 8. Frank is hired for the weekly rate of $5,000. Worges Expence 1,000 Wage Panable 22 863, Cech Ulle None. looo o

Answer 1

No journal entry shall be passed.

On December 28, the only event to occur is the hiring of Frank.

This is an event and not a financial transaction.

Though Frank starts his work immediately, the relevant adjusting entry will be made on December 31, the end of the year, but not on December 28.

(Remember we post adjusting entries only at the end of the period, but not every day).

So in the given situation mere hiring on Frank on December 28 is not a financial transaction to be recorded as a journal entry.

For the work done on December 28,29,30,31 by Frank, an adjusting entry will be passed on december 31.