Fukushima Company provides its employees with vacation benefits and a defined co

Question

Fukushima Company provides its employees with vacation benefits and a defined contribution pension plan. Employees earned vacation pay of $22,500 for the period. The pension plan requires a contribution to the plan administrator equal to 6% of employee salaries. Salaries were $264,000 during the period, and the full amount due was contributed to the pension plan administrator.

On December 31, provide the journal entry for the (a) vacation pay on page 11 of the journal and (b) pension benefit on page 12 of the journal. Refer to the Chart of Accounts for exact wording of account titles.

Explanation / Answer

Journal Entries :-

Particulars Debit ($) Credit ($) a. Vacation and Holiday Expenses 22500 To Vacation and Holiday Payable 22500 b Pension Expenses ($264000 * 6%) 15840 To Pension Liability 15840

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