Chapter 8 Smartbook

On September 1, 2018, Kale Corporation signed a 6-month, 12% interest-bearing promissory note for $100,000. The journal entry required at December 31, 2018 would include which of the following?

Debit interest expense $4,000

A company purchases inventory or supplies and promises to pay within 30 to 45 days. No formal agreement is signed. This transaction is recorded as a(n)

accounts payable

Rhodes borrowed $5,000 by signing a 5-year note with an interest rate of 8%. On the date the note is signed, Rhodes should

credit notes payable $5,000

On October 1, 2018, Perry Corporation signed a 12-month, 8% interest-bearing promissory note for $10,000. Assume that all appropriate adjusting journal entries were made at 12/31. The journal entry required when the note matures on October 1, 2019 would include a debit to interest expense for

$600

Which of these payroll taxes are paid by the employer and the employee? (Check all that apply.)

- Medicare - Social security

Which of these payroll taxes are paid only by the employer? (Check all that apply.)

- SUTA - FUTA

Which of the following are not required to be deducted from an employee's paycheck?

- State unemployment tax (SUTA) - Charitable contributions - Federal unemployment tax (FUTA)

Payroll withholdings ________________. (select all that apply.)

- are amounts substracted from employees' gross earnings to determine their net pay - decrease the amount of cash an employee receives

On September 1, 2018, Kale Corporation signed a 6-month, 12% interest-bearing promissory note for $100,000. The journal entry required March 1, 2019 at the maturity date includes which of the following entries?

- debit interest payable $4,000 - debit interest $2,000 - credit cash$106,000 - debit note payable $100,000

True or false: Your employer is allowed to keep the amounts withheld from gross pay

False

Amounts that are substracted from an employee's gross pay are referred to as

payroll withholdings

Payroll withholdings are

the items substracted from an employee's gross pay to arrive at take-home pay

The employer's portion of FICA tax remitted to the taxing authority is:

the same as the employee's portion

Taxes substracted from employees' pay and remitted to the government on their behalf are called

withholding taxes