You can use a journal entry to record employee bonuses in a similar way that you use a journal entry to record payroll.
As with a journal entry for payroll, a journal entry for employee bonuses credits either a Salaries (Bonuses) Payable account or a Payroll Checking account.
On the debit side of the journal entry (bonuses), you can use any of the following methods:
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You can debit an indirect expense account and have bonuses allocated as overhead to all of your firm’s projects. You can set up a special indirect expense account for this purpose. This approach is suitable if you are recording regular, relatively modest, employee bonuses that are considered an employee benefit.
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You can charge bonuses to an Other Revenue and Expense account (in the range 800.00 to 999.99). In effect, this produces a line item charge against operating profits, which falls below the bottom line. This approach is suitable if bonuses are based on profits, or if they are discretionary, large, and infrequent.
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You can charge a portion of bonuses to the direct labor accounts and the remaining portion to the indirect labor accounts, depending on the current direct/indirect labor proportion. This approach is suitable if bonuses are considered deferred compensation and are therefore guaranteed.