Paramount, Inc decided to reward its employees with a bonus of 7% on annual net income, after deducting the bonus
The company reported net income of $513,600 before the calculation of the bonus. Prepare the journal entry to accrue employee bonus expense.
What will be an ideal response
Employee Bonus Expense 33,600
Employee Bonus Payable 33,600 .Bonus = (Bonus % x Net income before bonus) / (1 + Bonus %)
Bonus = (7% x $513,600 ) / (1 + 7%) = $33,600
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