Answer:
Debit Salaries expense $6,250
Credit Salaries Payable $6,250
Explanation:
The University uses the accrual basis of accounting an as such though the amount to be paid to the hired professor will be paid in four quarterly calendar installments, the amount incurred has to be recorded at the end of the month even when the university is yet to pay.
Given that Annual pay = $150,000
Monthly pay = 1/12 × $150,000 = $12,500
Between August 16 and August 31, Year 1 is half the month hence the salaries expense = 1/2 × $12,500 = $6,250
The adjusting journal entry for August 31, Year 1 would be
Debit Salaries expense $6,250
Credit Salaries Payable $6,250
Being entries to recognize the associate professor salary between August 16 and August 31, Year 1.
