A business routinely deducts a portion of health insurance costs from the pay of its employees. This is done in order to split the cost of the insurance between the employer and employees. To illustrate the accounting for this withholding, ABC International incurs a health insurance cost of $500 per month for Mr. Jones, where he is responsible for paying $100 of the total cost. The company bookkeeper accounts for this transaction by first debiting the company’s health insurance expense account for the full $500 that was billed to it, and crediting the accounts payable account. Once the withholding event occurs, the bookkeeper credits the health insurance expense account in the amount of the withholding, which is $100. The net effect of these two entries is a net charge to the company of $400 for the medical insurance cost of Mr. Jones.