On August 1, Year 1, Ant Company sold Bee Company $1,500,000 of 10-year, 6% bonds, dated July 1 at 100 plus accrued interest. On
March 1, Year 2, Bee sold half of the bonds for $782,500 plus accrued interest. Present entries to record the following transactions:
Bee Company:
a. Purchase of bonds on August 1, Year 1.
b. Receipt of first semiannual interest amount on December 31, Year 1.
c. The sale of the bonds on March 1, Year 2.
Bee Company:
a. Purchase of bonds on August 1, Year 1.
b. Receipt of first semiannual interest amount on December 31, Year 1.
c. The sale of the bonds on March 1, Year 2.
1 answer:
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Part A:
Because, there is a ceiling on the amount of earnings that is taxable. Any earning below the ceiling will be taxed at 7.65% of the earning while any earning above the eiling will be taxed at 7.65% of the ceiling.
Given that the ceiling on the amount that is taxable is $117,000. If a worker earns $40,000, then the worker's FICA tax will be 7.65% of $40,000 = 0.0765 x $40,000 = $3,060
Therefore, the percentage of income that is paid in social security taxes by a worker in 2014 earning $40,000 is 7.65%
Part B:
Because, there is a ceiling on the amount of earnings that is taxable. Any earning below the ceiling will be taxed at 7.65% of the earning while any earning above the eiling will be taxed at 7.65% of the ceiling.
Given that the ceiling on the amount that is taxable is $117,000. If a worker earns $80,000, then the worker's FICA tax will be 7.65% of $80,000 = 0.0765 x $80,000 = $6,120
Therefore, the <span>percentage of income that is paid in social security taxes by a worker in 2014 earning</span> $80,000 is 7.65%
Part C:
Because, there is a ceiling on the amount of earnings that is taxable. Any earning below the ceiling will be taxed at 7.65% of the earning while any earning above the eiling will be taxed at 7.65% of the ceiling.
Given that the ceiling on the amount that is taxable is $117,000. If a worker earns $200,000, then the worker's FICA tax will be 7.65% of $117,000 = 0.0765 x $117,000 = $8,950.50
Therefore, the percentage of income that is paid in social security taxes by a worker in 2014 earning $200,000 is given by
Because, there is a ceiling on the amount of earnings that is taxable. Any earning below the ceiling will be taxed at 7.65% of the earning while any earning above the eiling will be taxed at 7.65% of the ceiling.
Given that the ceiling on the amount that is taxable is $117,000. If a worker earns $40,000, then the worker's FICA tax will be 7.65% of $40,000 = 0.0765 x $40,000 = $3,060
Therefore, the percentage of income that is paid in social security taxes by a worker in 2014 earning $40,000 is 7.65%
Part B:
Because, there is a ceiling on the amount of earnings that is taxable. Any earning below the ceiling will be taxed at 7.65% of the earning while any earning above the eiling will be taxed at 7.65% of the ceiling.
Given that the ceiling on the amount that is taxable is $117,000. If a worker earns $80,000, then the worker's FICA tax will be 7.65% of $80,000 = 0.0765 x $80,000 = $6,120
Therefore, the <span>percentage of income that is paid in social security taxes by a worker in 2014 earning</span> $80,000 is 7.65%
Part C:
Because, there is a ceiling on the amount of earnings that is taxable. Any earning below the ceiling will be taxed at 7.65% of the earning while any earning above the eiling will be taxed at 7.65% of the ceiling.
Given that the ceiling on the amount that is taxable is $117,000. If a worker earns $200,000, then the worker's FICA tax will be 7.65% of $117,000 = 0.0765 x $117,000 = $8,950.50
Therefore, the percentage of income that is paid in social security taxes by a worker in 2014 earning $200,000 is given by