How would you enter the Quickbooks Journal Entries for the following transaction
ID: 2462105 • Letter: H
Question
How would you enter the Quickbooks Journal Entries for the following transactions:
1. Dec. 1, paid $1,680 to National Insurance Company for a one-year insurance policy which “runs” from Dec. 1, 2015 – November 30, 2016. Check #102 was issued for payment.
2. Dec. 1, paid $3,600 to JB Commercial Properties for two months of building rent, the months of December 2015 and January 2016. Check #103 was issued for payment. Charge the December rent to “Rent Expense” since that amount will be used up in the current month.
3. Dec. 19, received a quarterly dividend check for $180 from Chevron Corporation.
4. Dec. 29, the BOD of Siesta Company declared and paid a $2,200 dividend to stockholders. Check #106 was issued to the clearing house which tracks stock ownership and makes the dividend payments for Siesta Company.
5. Dec. 30, the two employees are to be paid in cash for work performed during the month of December. Complete the following table to determine the amounts to be recorded in the two entries which are required =>
(1).The “employee entry” related to the gross and net pay [record two entries here, one for each employee’s check, use 12-13(a) and 12-13(b) as reference numbers for the JEs and check #108 for Joe McCoy and check #109 or Real McCoy], and
(2) the “employer entry” needed for the employer payroll taxes (FICA and Unemployment Taxes)
All taxes will be paid on January 2, 2016.
Please show debit and credit entries for each transaction as they would be entered into Quickbooks.
employee gross wage FIT SIT OASDI Medicare Total Taxes Net Pay Joe McCoy 3500 260 95 Real McCoy 2500 190 65 Total 6000 450 160Explanation / Answer
Journal entries in Quick books:
Dec 1, 2015 Firstly Add National Insurance company as a vendor, Insurance as an expense
and Advance Insurance as an asset. Entry is,
Insurance A/c Dr. 140
Advance Insurance A/c Dr. 1,540
To Bank A/c Cr. 1,680 [ Supplier column- National Insurance company ]
[ Being Cheque # 102 issued to National Insurance Company towards insurance amount paid in
in advance and Decmber month expense is shown as current period expense]
Dec 1, 2015 Firstly, Add JB Commercial Properties as Vendor , Rent expense as expense and Advance
Rent as an asset. The entry is,
Rent expense A/c Dr. 1,800
Advance rent A/c Dr. 1,800
To Bank A/c Cr. 3,600 [ Supplier column- JB Commerial properties]
[ Being Cheque # 103 issues to JB commercial properties towards 2months rent
and advance rent is credited for a month]
Dec 19 Firstly Add, Dividend under Income category. Entry is,
Bank A/c Dr. 180
To Dividend A/c 180
[ Being cheque received for Quarterly from Chevron Corporation]
Dec 29, 2015 Retained earnings A/c Dr. 2,200
To Dividends payable A/c cr. 2,200
[ Being dividends declared]
Dividends payable A/c Dr. 2,200
To Bank A/c Cr. 2,200
[ Being Check #106 issued to pay dividends]
Dec 30 Payroll entries:
Joe MCCoy: Gross wage for December = 3,500
FIT= 260, SIT = 95
OASDI = 3500* 0.62% = 21.7
Medicare = 3500*1.45% = 50.75. Similarly,
Real McCoy: Gross wage = 2500
FIT = 190, SIT = 65
OASDI = 2500*0.62% = 15.5
Medicare = 2500*1.45% = 36.25.
Journal entry as follows:
Salary expense A/c Dr. 6,000
To Federal Income Tax payable A/c Cr. 450
To State Income tax payable A/c Cr. 160
To FICA OASDI Tax payable A/c Cr. 37.2
To FICA Medicare tax payable A/c Cr. 87
To Bank A/c A/c Cr. 5,265.80
[ Being Checks #108, #109 issued to Joe and Real McCoy towards Salary]
In addition to the above, Employer payroll entry is to be recorded with additional row of unemployment taxes with respetive rates applicable.
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