Question

An employee earns $7,500 in wages and has $1,800 in Federal Income Tax withheld and $318 in State Income tax withheld. In addition, 1.45% for FICA-Medicare and6.2% for FICA-Social Security is withheld. What is the journal entry the employer does to record the payment to the employee?

Answer 1

Answer:The answer is salaries payable $4,808.25

Explanation:

Journal entry will be

Dr: Salaries expense $7,500

Cr: Federal income tax witheld payable $1,800

Cr: State income tax witheld payable $318

Cr : FICA Medicare tax payable ($7,500 × 1.45%) $108.75

Cr: FICA social security payable ($7,500 × 6.2%) $465

Cr: Salaries payable ($7,500 - $1,800 - $318 -$108.75 - $465) $4,808.25

(Being journal entry to record the payroll for the month)

Answer 2

Answer:

Dr. Wages Account with $7,500 (employee Wages Payable)

Cr. Federal Income Tax Payable on Employee Wage with $1,800

Cr. State Income Tax Payable on Employee Wage with $318

Cr. FICA Medicare Payable with $108.75 (1.45% on Taxable wage of $7,500)

Cr. FICA Social Security Payable with $465 (6.2% on Taxable wage of $7,500)

Cr. Bank/Cash/Wages Payable Account with $4,808.25 (Net Wage Payable to Employee)

Explanation:

Dr. Wages Account with $7,500 (employee Wages Payable)

Cr. Federal Income Tax Payable on Employee Wage with $1,800

Cr. State Income Tax Payable on Employee Wage with $318

Cr. FICA Medicare Payable with $108.75 (1.45% on Taxable wage of $7,500)

Cr. FICA Social Security Payable with $465 (6.2% on Taxable wage of $7,500)

Cr. Bank/Cash/Wages Payable Account with $4,808.25 (Net Wage Payable to Employee)