1. Which one of the following is an unsecured liability with priority in a Chapter 7 bankruptcy? A. Amounts due to pension plans for services rendered 9 months ago. B. Compensation owed to employees for services rendered 7 months ago. C. $20,000 of a $100,000 loan secured with property having a fair value of $80,000. D. Customer deposits for goods or services not delivered.

On january 15, the end of the first biweekly pay period of the year, north company’s payroll register showed that its employees earned $32,000 of sales salaries. withholdings from the employees’ salaries include fica social security taxes at the rate of 6.2%, fica medicare taxes at the rate of 1.45%, $3,000 of federal income taxes, $772 of medical insurance deductions, and $260 of union dues. no employee earned > $7,000 in this first period. prepare the journal entry to record north company’s january 15 (employee) payroll expenses and liabilities.