In April Homer Simpson hired a new employee at a rate of 100

In April, Homer Simpson hired a new employee at a rate of $1,000 per month to start work at the beginning of May. In April, Homer Simpson should record:

nothing, because an exchange of promises is not a transaction.

a $1,000 increase to Wage expense and a $1,000 decrease to Cash.

a $1,000 increase in Wages Payable and a $1,000 increase in Wages Expense.

a $1,000 increase to Prepaid wages and a $1,000 decrease to Cash.

Solution

In April, Homer Simpson hired a new employee at a rate of $1,000 per month to start work at the beginning of May. In April, Homer Simpson should record:

So answer is a) Nothing, because an exchange of promises is not a transaction