Accounting 301

Total payroll of Watson Co. was $2.000.000. of which $1.500,000 is subject to social security tax. The amount of wages subject to unemployment tax was $400.000. Federal income taxes withheld were $40,000 and state income taxes withheld were $125,000. The state unemployment tax is 1.2%, the federal unemployment tax is 0.8%, and the social security tax is 6.2% (OASDI) and 1.45% (Medicare) on all salaries and wage. Required: 1.) Prepare the journal entry to record the salaries and wages. 2.) Prepare the journal entry to record the employer payroll taxes