Question

A) In January, gross earnings in Lily Company totaled $78,000. All earnings are subject to 7.65%...

A) In January, gross earnings in Lily Company totaled $78,000. All earnings are subject to 7.65% FICA taxes, 5.40% state unemployment taxes, and 0.80% federal unemployment taxes.

Prepare the entry to record January payroll tax expense. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Round answers to 0 decimal places, e.g. 5,275.)

Date

Account Titles and Explanation

Debit

Credit

B) C.S. Lily Company had the following transactions involving notes payable.

July 1, 2020

Borrows $54,500 from First National Bank by signing a 9-month, 8% note.

Nov. 1, 2020

Borrows $63,000 from Lyon County State Bank by signing a 3-month, 6% note.

Dec. 31, 2020

Prepares adjusting entries.

Feb. 1, 2021

Pays principal and interest to Lyon County State Bank.

Apr. 1, 2021

Pays principal and interest to First National Bank.


Prepare journal entries for each of the transactions. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Round answers to 0 decimal places, e.g. 5,275. Record journal entries in the order presented in the problem.)

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