Noura Company offers an annual bonus to employees (to be shared equally) if the company meets certain net income goals. Prepare the journal entry to record a $15,000 bonus owed (but not yet paid) to its workers at calendar year-end.

                                                            Dr.             Cr.

Employees Bonus Expense          $15,000

Bonus Payable                                                 $15,000

Explanation:

Bonus is paid to employee on a decided amount or decided percentage or ratio. It is an expense for the organization and it should be recorded in the relevant period as per accrual concept even it is not paid. The Entry will be made as Bonus expense is debited and Bonus payable is credit because at the end of year it is unpaid.

one of the appeals of a sole proprietorship is that business expenses are kept separate from your personal income tax return

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