Question

Prepare journal entries to record the following production activities for Hotwax.

1. Incurred direct labor of \(125,000 (credit Factory Wages Payable).
2. Incurred indirect labor of \)10,000 (credit Factory Wages Payable).
3. Total factory payroll of $135,000 was paid in cash

Short answer

The total debit and credit side of the journal is $270,000.

Step-by-step solution

Meaning of Journal entry.

The primary thing a bookkeeper does within the books of accounts is to create journals. A journal entry serves the objective of precisely recording each commerce transaction, whether physically or online.

Journal entry to record Incurred direct labour of $125,000.

Date	Particulars	Debit ($)	Credit ($)
	Work-in-process inventory	125,000
	Factory payroll payable		125,000
	(To record direct labour used in production)

Journal entry to record Incurred indirect labour of $10,000.

Date	Particulars	Debit ($)	Credit ($)
	Factory overhead	10,000
	Factory payroll payable		10,000
	(To record indirect labour used in production)

Journal entry to record Total factory payroll of $135,000 was paid in cash.

Date	Particulars	Debit ($)	Credit ($)
	Factory payroll payable	135,000
	Cash		135,000
	(To record payments of factory payroll)