Textbook Problem

Payroll and Payroll Taxes Rand Company’s payroll on December 31 of the current year is as follows:

• total payroll, $500,000
• payroll in excess of $128,400 to each employee, $350,000
• payroll in excess of $7,000 to each employee, $400,000
• income taxes withheld, $85,000
• union dues withheld, $10,000
• tax rates: State unemployment tax, 5.4%; FICA tax, 8% for employees and 8% for employers for any amounts over $117,000; federal unemployment tax, 0.6%

Required:

Prepare the journal entries for Rand’s payroll and payroll taxes.