How do you account for bonuses? Originally, I had thought that you just pay them out at year end based on peformance and ability to afford paying a bonus. The limited information I've been able to find on the subject seems to suggest that it is accrued as earned, but the thing I don't understand is how do you accrue it unless you already know you're going to pay it and if that's the case, then is it really a bonus(sounds more like salary to me)?

Also, if you can show some journal entries for this subject, it would be much appreciated.

The JE would be

DR Bonus expense

CR Accrued liability

You know that a bonus is going to be paid becaus it is usually in the board minutes. So you have to accrue since it relates to the year in question. The amount is usually stated as a % of net income before bonus.