Pete Mehling is the president of Mehling Company, and his cousin, John Mehling, is the vice president. Their compensation package includes bonuses of 3 percent for Pete Mehling and 2 percent for John Mehling of net income that exceeds $\$ 200,000$. Net income for the year 2000 has just been computed to be $\$ 990,000$.

1. Compute the amount of bonuses to be paid to Pete and John Mehling.

2. Prepare the journal entries to record the accrual and payment of the bonuses. Include all withholding taxes in an account called Various Taxes Payable, similar to the one in the chapter. Taxes payable on the bonuses total $\$ 9,200$ for Pete and $\$ 6,300$ for John.