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Full Version: End of Service Benefits Journal Entry
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Salaam brothers and Sisters !

I am confused regarding this End of Service Benefits entries in books of accounts.

First I'll explain how the system works (a country-specific situation)

For the first 5 years of service
(Last Month Basic Salary/2) x 5 years

Above than that
(Last Month Basic Salary x No. of Years more than 5)

For Example LMBS 15,000 (total service 15 years)
End of Service Benefit
(15000/2) x 5 years = 37,500
+ 15000 x 10 years = 150,000

Total = 187,500

Now my questions are

1. What would be the journal entry in the first year (Year 1) of service and what amounts?
2. What about expense in Income Statement and Balance Sheet ?
3. What about the same in Year 2 ?

Thank you so much

Allah Hafiz