Chapter 9, Problem 6E

To determine

Tax:

It is a compulsory financial charge imposed by government on individuals and corporate, failure to pay which invites legal actions.

Social Security Tax:

Social security tax scheme is a tax scheme which is imposed both on employee and employer. Its rate keeps on changing.
.

Journal Entries:

Journal is the book for recording financial transactions in chronological order. It is the first step of accounting. In this process each transaction has two sides- debit side and credit side. Total of debit side must be equal to total of credit side.

Accounting rules for journal entries:

To increase balance of the account: Debit assets, expenses, losses and credit all liabilities, capital, revenue and gains.

To decrease balance of the account: Credit assets, expenses, losses and debit all liabilities, capital, revenue and gains.

To prepare: Journal entries in the books of employer for salary and payroll liabilities.