Barbara Muller Services (BMS) pays its employees monthly. The payroll information listed below is for January 2013, the first month of BMS's fiscal year. Assume none of the employees' earnings reached $7,000 during the month.
| Salaries |
$74,000 |
| Federal income taxes to be withheld |
19,000 |
| Federal unemployment tax rate |
.80% |
| State unemployment tax rate (after FUTA deduction) |
5.40% |
| Social security tax rate |
6.2% |
| Medicare tax rate |
1.45% |
| The journal entry to record payroll for the January 2013 pay period will include a debit to payroll tax expense of: |
|
$10,249 |
|
$5,661 |
|
$4,588 |
|
$49,339 |
On January 1, 2013, Solo Inc. issued 1,400 of its 10%, $1,000 bonds at 99. Interest is payable semiannually on January 1 and July 1. The bonds mature on January 1, 2023. Solo paid $65,000 in bond issue costs. Solo uses straight-line amortization. The amount of interest expense for the year is:
|
$141,400 |
|
$147,900 |
|
$149,300 |
|
$140,000 |