Problem:
ABC Inc. pays its employees monthly. The payroll information is listed below this is for January 2013, the first moth of ABC's fiscal year.
| Salaries |
$80,000 |
| Federal income taxes to be withheld |
16,000 |
| Federal unemployment tax rate |
0.80% |
| State umemployment tax rate (after FUTA deduction) |
5.40% |
| Social security tax rate |
6.2% |
| Medical Tax Rate |
1.45% |
Required: Prepare the journal entry to record payroll for the January 2013 pay period
Note: Please provide equation and explain comprehensively and give step by step solution.