On january 1 2013 solo inc issued 1400 of its 10 1000 bonds

Reference no: EM13570962

Barbara Muller Services (BMS) pays its employees monthly. The payroll information listed below is for January 2013, the first month of BMS's fiscal year. Assume none of the employees' earnings reached $7,000 during the month.

Salaries	$74,000
Federal income taxes to be withheld	19,000
Federal unemployment tax rate	.80%
State unemployment tax rate (after FUTA deduction)	5.40%
Social security tax rate	6.2%
Medicare tax rate	1.45%

The journal entry to record payroll for the January 2013 pay period will include a debit to payroll tax expense of:

	$10,249
	$5,661
	$4,588
	$49,339

On January 1, 2013, Solo Inc. issued 1,400 of its 10%, $1,000 bonds at 99. Interest is payable semiannually on January 1 and July 1. The bonds mature on January 1, 2023. Solo paid $65,000 in bond issue costs. Solo uses straight-line amortization. The amount of interest expense for the year is:

	$141,400
	$147,900
	$149,300
	$140,000

Reference no: EM13570962

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