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Sunny Hills Farm estimated its payroll for the coming year to be $102,000. Its workers' compensation insurance premium rate of 0.6% is paid at the beginning of each quarter.
Required:
1. Calculate the estimated cost of workers' compensation insurance for the year.
2. Show the journal entry for the first quarterly payment on January 2, 20--.
3. Assume Sunny Hills Farm's actual payroll for the year was $105,000. Calculate the additional premium owed for 20--. Record the adjustment needed at December 31, 20--. The actual payment of the additional insurance will not take place until January of the following year.
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