Answer :
Answer:
On 25 September, we have:
Debit Salary expenses for $5,750,000; Credit Bank for $3,750,000; and Credit PAYE payable for $2,000,000.
Explanation:
On 25 September, the journal entries will look as follows:
Date Account Title Dr ($) Cr ($)
Sep. 25 Salary expenses 5,750,000
Bank (w.1) 3,750,000
PAYE payable 2,000,000
(To record total gross salary.)
Note that when the PAYE is eventually paid to the authorities in October, let say on October 5, the journal entries will look as follows:
Date Account Title Dr ($) Cr ($)
Oct. 05 PAYE payable 2,000,000
Bank 2,000,000
(To record PAYE paid to the authorities.)
Workings:
w.1: Bank = Total gross salary - PAYE = $5,750,000 - $2,000,000 = $3,750,000