098 Bonuses-Owners
Adjustments
Synopsis
Account 098, Bonuses-Owners, is established to record the amount of Bonuses paid or payable to Owners of the dealership. Professional tax and accounting advice should be obtained regarding the tax implications to both the dealership and the Owners due to Bonuses paid.
Debits |
Credits |
|
|
Example 1
Record the monthly accrual of $30,000 for the owner’s bonus.
Journal: Payroll Journal
Entry: |
|
Debit |
Credit |
Account 098 |
Bonuses – Owners |
$30,000 |
|
Account 329 |
Owner’s Bonuses Payable |
|
$30,000 |
Comments
When Bonuses are paid to Owners during the month, the amounts of the Bonus payments are debited to this account.
When Bonuses are paid at a later date, such as the end of the year, the monthly provision for the Bonuses should be credited to Account 329 Owners Bonuses Payable and debited to Account 098, Bonuses-Owners.