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20 February, 23:57

ABC Grocers uses a separate checking account to pay their employees. The gross pay for the period was $850. However, after deductions were taken out, the net pay for the period was $790. The journal entry to record the issuance of payroll checks to their employees would include:

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  1. 21 February, 00:57
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    Debit Payroll expense $850

    Credit Cash/Bank Account $790

    Credit Deduction (liability) $60

    Being entries to record payroll expense

    Explanation:

    Given;

    Gross pay for the period = $850

    After deductions were taken out, the net pay for the period = $790

    Therefore, amount deducted = $850 - $790

    = $60

    The journal to record this would include;

    Debit Payroll expense $850

    Credit Cash/Bank Account $790

    Credit Deduction (liability) $60

    Being entries to record payroll expense

    On remittance of the deduction to the appropriate party

    Debit Deduction (liability) $60

    Credit Cash/Bank Account $60
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