Journal entries for transactions

Hzne Snerrm
timer Asked: Apr 23rd, 2017

Question Description

I need the journal entries for the below transactions:

  1. The final payroll entry (on 12/31/16) has wages of $25,000. There is $5,000 in federal withholding and $1,300 in state withholding. The social security tax rate is 12.4% and Medicare tax rate is 2.9% (These are total tax rates not just the employee or employer tax rates). FUTA has a 0.6% tax rate and SUTA has a 5.4% tax rate. There are no fringe benefits associated with this payroll. The wages are not paid in 2016, they will be paid January 2017. Round to nearest dollar. (Chapter 13)
  2. No pension expense related adjustments have been made. Service costs for the year is $16,000. The interest charged is $8,500. The expected return was $6,000. There was no prior service costs. The unamortized gain fell within the corridor so no entry is needed. Record the pension expense in an adjusting entry dated 12/31/16. (Chapter 17)
  3. On 12/1/16 Choice leased a new machine. The machine normally sells for $23,500. The applicable interest rate is 8%. The lease term is 5 years and the machine has a useful life of 6 years. Annual payments begin December 1 2016, and due each subsequent year annually. There is no BPO; there is no transfer of ownership. Record the new capital lease and first payment made on 12/1/16. Round to the nearest dollar. Regarding the above lease transaction, you do not need to do a complete amortization table. However, you do need to accrue the interest for 1 month (the month of December) in an adjusting entry dated 12/31/16. Also, do not worry about depreciation expense. Let’s just assume it’s included in the current depreciation expense.
  4. On 12/1/16 Choice decides to issue a bond to raise cash. Choice issues $100,000 of 10% bonds. Interest is payable annually on November 30. They mature in five years. The market rate is 8%. All bonds were sold for cash. Regarding the above bond issuance, you do not need to do a complete amortization table. However, you do need to accrue the interest for 1 month (the month of December) in an adjusting entry dated 12/31/16.

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