Company I am working with has a PEO who pays invoices, employee tax, employee benefits, etc
Assuming the PEO is the owner?
Let me try this again. I thought PEO was the owner. I can see this is the service provider. Below is the journal entries that should have been posted for the payroll transaction and the FEB prepayment.
You are questioning the debit on the income statement that you have labeled as "collection". This item is correctly reported in the expenses from what I can tell. Sometimes companies add this into wages expense instead of separating it into another GL. That is because they want to see what portion of wage expense is the EE taxes collected.
I notice in the payment you made for $144,029.24, you didn't include the contractor pay. That means it was paid on another transaction or there should be a liability remaining on the balance sheet to pay it in the future. I couldn't tell from your notes.
The February prepaid should be adjusted in February when you create the new payroll transactions for that period.
|Payroll journal entry||Debit||Credit|
|Benefit Expense (prepaids)||3618.07|
|Benefit Expense (family leave)||195.5|
|Wage Expense EE Taxes (collection)||21384.97|
|Wage Expense ER Taxes||8601.74|
|Prepaid Health, Dental, Vision ( FEB )||10713.3|
|Benefit Expense (WC)||218.74|
|Contractor Payable||11158.33||due (wasn't included in the Payment you provided for view)|
|Prepaid Health, Dental, Vision||3618.07||paid / clears 3093.07 & 525.00|
|Benefit Payable (family leave)||195.5||due|
|EE Taxes Payable||21384.97||due|
|ER Taxes Payable||8601.74||due|
|Benefits Payable ( prepaid for FEB)||10713.3||due|
|Benefit Payable (WC)||218.74||due|
|Payment of Payroll & Other|
|Benefit Payable (family leave)||195.5|
|EE Taxes Payable||21384.97|
|ER Taxes Payable||8601.74|
|Benefit Payable (FEB)||10713.3|
|Benefit Payable (WC)||218.74|
|Other Expenses (total of all other)||55715.8|