Question

Problem 1 – Entries for notes payable

A business issued a 60-day, 5% note for $85,000 to a creditor on account. Journalize the entries to record (a) the issuance of the note and (b) the payment of the note at maturity, including interest.

Problem 2 – Calculate payroll

An employee earns $24 per hour and 1.5 times that rate for all hours in excess of 40 hours per week. Assume that the employee worked 44 hours during the week. Assume further that the social security tax rate was 6.2%, the Medicare tax rate was 1.45%, and federal income tax to be withheld was $325.

1. Determine the gross pay for the week.
2. Determine the net pay for the week.

Problem 3 – Payroll entries

The payroll register for Crouse Company for the week ended November 18 indicated the following:

            Salaries                                                $1,500,000

            Social Security tax withheld                      93,000

            Medicare tax withheld                                           21,750

            Federal income tax withheld                   300,000

In addition, state and federal unemployment taxes were calculated at the rate of 4.2% and 0.90%, respectively, on $400,000 of salaries.

1. Journalize the entry to record the payroll for the week on November 18.
2. Journalize the entry to record the payroll tax expense incurred for the week of November 18.

Answer 1