Question - Major Co. has five employees, each of whom earns $2,500 per month and have been employed since January 1. FICA Social Security taxes are 6.2% of the first $106,800 paid to each employee, and FICA Medicare taxes are 1.45% of gross pay. Federal income tax withholding is 15% of gross pay. State income tax withholding is 8% of the dollar amount withheld for federal income tax purposes.
Required: Prepare the journal entries to pay the March 31 payroll, assuming Major Co. uses a special payroll bank account.