Chap009wildtextbook

The note bears interest at 6 per year principal and

Info iconThis preview shows pages 11–22. Sign up to view the full content.

View Full Document Right Arrow Icon
The note bears interest at 6% per year. Principal and interest are due in 3 months (December 1, 2011). DR CR Sep 1 Cash 20,000 Notes payable 20,000 To record note to American Bank 9-11
Background image of page 11

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
On December 1, 2011, Smith would make the following entry: DR CR Notes payable 20,000 Interest expense 300 Cash 20,300 To record payment of note and interest $20,000 × 6% × (3 / 12) = $300 Face Value Equals Amount Borrowed 9-12
Background image of page 12
Note Date End of Period Maturity Date An adjusting entry is required to record interest expense incurred to date. End-of-Period Adjustment to Notes 9-13
Background image of page 13

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Dec. 1, 2011 Dec. 31, 2011 Feb. 1, 2012 James Burrows borrowed $8,000 on Dec. 1, 2011, by signing a 12%, 2-month note payable. End-of-Period Adjustment to Notes Note Date End of Period Maturity Date 9-14
Background image of page 14
On December 1, 2011, James Burrows would make the following entry: End-of-Period Adjustment to Notes Dec 1 Cash 8,000 Notes payable 8,000 To record amount borrowed from bank On December 31, 2011, the adjustment is: DR CR Dec 31 Interest expense 80 Interest payable 80 To accrue interest on note $8,000 × 12% × (1 / 12) = $80 9-15
Background image of page 15

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
On February 1, 2012, James Burrows would make the following entry. End-of-Period Adjustment to Notes DR CR Feb 1 Notes payable 8,000 Interest payable 80 Interest expense 80 Cash 8,160 To record payment of note $8,000 × 12% × (1 / 12) = $80 9-16
Background image of page 16
Employers incur expenses and liabilities from having employees. Payroll Liabilities 9-17
Background image of page 17

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Employee Payroll Deductions FICA Taxes Medicare Taxes Federal Income Tax State and Local Income Taxes Voluntary Deductions Gross Pay Net Pay 9-18
Background image of page 18
FICA Taxes — Soc. Sec. FICA Taxes Medicare 2010: 6.2% of the first $106,800 earned in the year ( Max = $6,622). 2010: 1.45% of all wages earned in the year. Employers must pay withheld taxes to the Internal Revenue Service (IRS). Employee FICA Taxes Federal Insurance Contributions Act (FICA) 9-19
Background image of page 19

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Amounts withheld depend on the employee’s earnings, tax rates, and number of withholding allowances. Employers must pay the taxes withheld from employees’ gross pay to the appropriate government agency. Federal Income Tax State and Local Income Taxes Employee Income Tax 9-20
Background image of page 20
Amounts withheld depend on the employee’s request. Employers owe voluntary amounts withheld from employees’ gross pay to  the designated agency. Voluntary Deductions
Background image of page 21

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 22
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

Page11 / 36

The note bears interest at 6 per year Principal and...

This preview shows document pages 11 - 22. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online