Question

#6

a. Margaret’s regular hourly wage rate is $20, and she receives an hourly rate of $30 for work in excess of 40 hours. During a January pay period, Margaret works 49 hours. Margaret’s federal income tax withholding is $97, and she has no voluntary deductions.

Prepare the employer’s journal entry to record payroll taxes for the period. Ignore unemployment taxes. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Assume FICA rate of 7.65%. Round the answers to 2 decimal places, e.g. 15.25.)

b. Blossom Company issues $410,000, 10-year, 7% bonds at 95.

Prepare the journal entry to record the sale of these bonds on March 1, 2019. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

c. Pina Colada Corp. issues $330,000, 20-year, 6% bonds at 104.

Prepare the journal entry to record the sale of these bonds on June 1, 2019. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Answer 1

a
Gross pay	1070	=(40*20)+(49-40)*30
Journal	Debit	Credit
Payroll Taxes Expense	81.86		=1070*7.65%
FICA Taxes Payable		81.86
b
March 1, 2019
Journal	Debit	Credit
Cash	389500		=410000*0.95
Discount on Bonds payable	20500
Bonds payable		410000
c
June 1, 2019
Journal	Debit	Credit
Cash	343200		=330000*1.04
Bonds payable		330000
Premium on Bonds payable		13200