Zennia Company provides its employees with varying amounts of vacation per year,depending on the length of employment.The estimated amount of the current year's vacation cost is $135,000.The journal entry to record the adjusting entry required on December 31,the end of the current year,to record the current month's accrued vacation pay is
A)$135,000
B)$67,500
C)$0
D)$11,250

Question

Quizplus · Accepted Answer

The adjusting entry to record the current month's accrued vacation pay is to debit Vacation Expense for $11,250 and credit Vacation Payable for $11,250. The estimated amount of the current year's vacation cost is $135,000, and the company has already recorded $123,750 of vacation expense during the year. Therefore, the adjusting entry is for the remaining $11,250 of vacation expense.

Zennia Company Provides Its Employees with Varying Amounts of Vacation