Question -
Q1) Elkins Company sold $2,500,000, 8%, 10-year bonds on July 1, 2011.The bonds were dated July 1, 2011, and pay interest July 1 and January 1. Elkins Company uses the straight-line method to amortize bond premium or discount. Assume no interest is accrued on June 30.
Instructions
(a) Prepare all the necessary journal entries to record the issuance of the bonds and bond interest expense for 2011, assuming that the bonds sold at 104.
(b) Prepare journal entries as in part (a) assuming that the bonds sold at 98.
(c) Show balance sheet presentation for each bond issue at December 31, 2011.
Q2) Employee earnings records for Brantley Company reveal the following gross earnings for four employees through the pay period of December 15.
C. Mays $83,500 D. Delgado $105,600
L. Jeter $104,500 T. Rolen $106,800
For the pay period ending December 31, each employee's gross earnings is $4,000. Employees are required to pay a FICA tax rate of 8% gross earnings of $106,800.
Instructions - Compute the FICA withholdings that should be made for each employee for the December 31 pay period. (Show computations.)