Wolfe Company Employer Offers a Bonus to Its Employees Based

Multiple Choice

Wolfe Company employer offers a bonus to its employees based on the company's annual pre-bonus net income (to be equally shared by all) .This year's bonuses are estimated at $25,000.How would the company record the year-end adjusting entry to record this benefit?

A) Debit Salaries Expense for $25,000 and credit Employee Bonus Expense for $25,000.
B) Debit Payroll Tax Expense for $25,000 and credit Payroll Taxes Payable for $25,000.
C) Debit Income Summary for $25,000 and credit Retained Earnings for $25,000.
D) Debit Employee Bonus Expense for $25,000 and credit Bonus Payable for $25,000.
E) Debit Bonus Payable for $25,000 and credit Employee Bonus Expense for $25,000.