The following accounts, with the balances indicated, appear in the ledger of Wadsley Gifts Co. on December 1 of the current year:

The following transactions relating to payroll, payroll deductions, and payroll taxes occurred during December:

Dec. 2.             Issued Check No. 321 for $2,800 to Johnson Bank to purchase U.S. savings bonds for employees

3.                     Issued Check No. 322 to Johnson Bank for $20,877, in payment of $7,234 of social security tax, $1,904 of Medicare tax, and $11,739 of employees’ federal income tax due.

14.       Journalized the entry to record the biweekly payroll. A summary of the payroll record follows:

14.       Issued Check No. 331 in payment of the net amount of the biweekly payroll.

14.       Journalized the entry to record payroll taxes on employees’ earnings of December 14: social security tax, $3,550; Medicare tax, $951; state unemployment tax, $300; federal unemployment tax, $100.

17.       Issued Check No. 335 to Johnson Bank for $20,287, in payment of $7,100 of social security tax, $1,902 of Medicare tax, and $11,285 of employees’ federal income tax due.

18.       Issued Check No. 340 to Tidy Insurance Company for $22,000, in payment of the semiannual premium on the group medical insurance policy.

28.       Journalized the entry to record the biweekly payroll. A summary of the payroll record follows:

28.        Issued Check No. 352 in payment of the net amount of the biweekly payroll.

28.       Journalized the entry to record payroll taxes on employees’ earnings of December 28: social security tax, $3,348; Medicare tax, $930; state unemployment tax, $150; federal unemployment tax, $50.

30.       Issued Check No. 354 to Johnson Bank for $2,800 to purchase U.S. savings bonds for employees.

30.                   Issued Check No. 356 for $17,065 to Johnson Bank in payment of employees’ state income tax due on December 31.

Dec. 31.            Paid $34,000 to the employee pension plan. The annual pension cost is $40,000. (Record both the payment and unfunded pension liability.)

Instructions
1. Journalize the transactions.
2. Journalize the following adjusting entries on December 31:
a. Salaries accrued: operations salaries, $3,420; officers' salaries, $2,240; office salaries, $540. The payroll taxes are immaterial and are not accrued.
b. Vacation pay,$11,500.

Salaries Payable 218 Bond Deductions Payable 219 Medical Insurance Payable $ 2,800 22,000 211 212 Social Security Tax Payable 213 Medicare Tax Payable 214 Employees Federal Income Tax Payable 215 Employees State Income Tax Payable 216 State Unemployment Tax Payable 217 Federal Unemployment Tax Payable $ 7,234 1,904 11,739 11,422 1,200 400 611 Operations Salaries Expense 711 Officers Salaries Expense 712 Office Salaries Expense 719 Payroll Tax Expense 766,000 126,000 109,318