Part A: State Mill Company, whose fiscal year ends December 31, completed the following transactions involving notes payable:

2010

Nov. 25 Purchased a new loading cart by issuing a 60-day 10 percent note for $86,400.

Dec. 31 Made the end-of-year adjusting entry to accrue interest expense.

2011

Jan. 24 Paid off the loading cart note.

Required

1. Prepare entries in journal form for State Mill Company’s notes payable transactions.

2. When notes payable appears on the balance sheet, what other current liability would you look for to be associated with the notes? What would it mean if this other current liability did not appear?

Part B: At the end of October, the payroll register for State Mill Company contained the following totals: wages, $185,500 federal income taxes withheld, $47,442; state income taxes withheld, $2,690; medical insurance deductions, $6,400; and wages subject to unemployment taxes, $114,480.

Required

Prepare entries in journal form to record the (1) monthly payroll and (2) employer payroll expenses, assuming Social Security and Medicare taxes equal to the amount for employees, a federal unemployment insurance tax of 0.8 percent, a state unemployment tax of 5.4 percent, and medical insurance premiums for which the employer pays 80 percent of the cost.