According to a Summary of the Payroll of Scotland Company

question 136

Multiple Choice

According to a summary of the payroll of Scotland Company, $450,000 was subject to the 6.0% social security tax and $500,000 was subject to the 1.5% Medicare tax. Federal income tax withheld was $98,000. Also, $15,000 was subject to state (5.4%) and federal (0.8%) unemployment taxes. The journal entry to record accrued payroll taxes would include a

• A) debit to SUTA Payable of $810
• B) debit to SUTA Payable of $18,900
• C) credit to SUTA Payable of $810
• D) credit to SUTA Payable of $18,900

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Definitions:

Current Yield

The annual income (interest or dividends) divided by the current price of the security.

Market Price

The current price at which an asset or service can be bought or sold in the open market.

Zero-Coupon Bond

A type of debt security that does not pay interest (coupon) but is traded at a deep discount, rendering profit at maturity when the bond is redeemed for its full face value.

Yield To Maturity

The total return anticipated on a bond if it is held until it matures, including all interest payments and the repayment of principal.