Final answer:
To account for an employee's earned salary and associated withholdings, debit Salaries Expense for the full earned amount and credit the respective liability accounts for FICA Social Security, FICA Medicare, federal income taxes, and medical insurance, with the net amount after these deductions credited to Salaries Payable.
Step-by-step explanation:
To record the employer's salaries expense and related liabilities for the employee who earned $5,900 during the month of January, and will be paid in February, you would make the following journal entries:
- Debit Salaries Expense for $5,900 (the gross pay before deductions).
- Credit FICA Social Security Payable for $365.80.
- Credit FICA Medicare Payable for $85.55.
- Credit Federal Income Taxes Payable for $628.35.
- Credit Medical Insurance Payable for $250.75.
- Credit Salaries Payable for the net pay.
The Salaries Payable is calculated by subtracting all deductions from the gross salary, which equals $5,900 - ($365.80 + $85.55 + $628.35 + $250.75) = $4,569.55. This is the amount that the employee will actually receive and the employer owes this as a liability until it's paid.
Here is how the journal entry would look:
Salaries Expense................... $5,900
FICA Social Security Payable...... $365.80
FICA Medicare Payable............. $85.55
Federal Income Taxes Payable...... $628.35
Medical Insurance Payable......... $250.75
Salaries Payable.................. $4,569.55