Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Nature Gnome Company's Ashley and Zorro Winter are continuing their analysis of the company's position and believe the company will need to borrow $26,000 in
Nature Gnome Company's Ashley and Zorro Winter are continuing their analysis of the company's position and believe the company will need to borrow $26,000 in order to expand operations. They consult Stream City Bank and secure a 12%, one-year note on September 1, 2019, with interest due at maturity. Additionally, the company hires an employee, Joe Vern, on September 1. Joe will receive a salary of $5,000 per month. Payroll deductions include federal income tax at 20%, OASDI at 6.2%, Medicare at 1.45%, and monthly health insurance premium of $200. The company will incur matching FICA taxes, FUTA tax at 0.6%, and SUTA tax at 5.4%. Round calculations to two decimals. Omit explanations on journal entries Read the requirements A Requirements 1. Record the issuance of the $26,000 note payable on September 1, 2019. 2. Record the employee payroll and employer payroll tax entries on September 30, 2019 3. Record all payments related to September's payroll. Payments are made on October 15, 2019 4. Record the entry to accrue interest due on the note at December 31, 2019. 5. Record the entry Nature Gnome Company would make to record the payment to the bank on September 1, 2020. Print Done
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started