Question
Lynbrook, Inc. has decided to begin processing monthly payroll transactions in house, rather than using a Payroll Service Company, like ADP. On January 25, 2021,
Lynbrook, Inc. has decided to begin processing monthly payroll transactions in house, rather than using a Payroll Service Company, like ADP. On January 25, 2021, the end of the first monthly pay period of the year, Lynbrooks payroll register showed that employees earned $25,000 of office salaries and $50,000 of sales salaries. Withholdings from the employees' salaries include FICA Social Security taxes at the rate of 6.2%, FICA Medicare taxes at the rate of 1.45%, $15,000 of federal income taxes, $1,500 of medical insurance deductions, and $840 of union dues. No employee earned more than $7,000 in January.
Required:
1. Prepare the journal entry related to the gross pay earned by employees on January 25.
(round nearest dollar)
2. Prepare the journal entry for Lynbrooks portion of payroll taxes related to the January 25 payroll. Lynbrooks state unemployment tax rate to 4% of the first $7,000 paid each employee. The federal unemployment tax rate is 0.6%. (round to nearest dollar)
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