Bailey Dry Cleaners has six employees who were paid the following wages during 2019:
Frank Johnson ....................$ 27,000
Bill Long .................................18,000
Duff Morse ...........................130,000
Laura Stewart ........................28,000
Cindy Sharpe .........................26,000
Melissa Ledbetter .................20,000
Total ...................................$249,000
The state allows the company a 1% unemployment compensation merit-rating reduction from the normal rate of 5.4%. The federal unemployment rate is 0.6%. The maximum unemployment wages per employee are $7,000 for both the state and the federal government. Income tax withholdings of 20% are applied to all employees. A FICA tax rate of 8% on the employee and 8% on the employer is applied to the first $128,400 of each employee’s wages.

Required:
1. Calculate the amount of payroll taxes to be paid by Bailey.
2. Prepare the journal entries to record the payment of payroll and the payroll tax expense.