Question

Martin Services Company provides its employees vacation benefits and a defined contribution pension plan. Employees earned vacation pay of $46,000 for the period. The pension plan requires a contribution to the plan administrator equal to 8% of employee salaries. Salaries were $800,000 during the period. Question Content Area a. Provide the journal entry for the vacation pay. If an amount box does not require an entry, leave it blank. blank Question Content Area b. Provide the journal entry for the pension benefit. If an amount box does not require an entry, leave it blank. blank

Answer 1

The journal entry for the vacation pay is a debit to Vacation Pay Expense and a credit to Vacation Pay Payable. The journal entry for the pension benefit is a debit to Pension Expense and a credit to Pension Payable.

Step-by-step explanation:

To record the vacation pay, you would make the following journal entry:

Debit: Vacation Pay Expense $46,000

Credit: Vacation Pay Payable $46,000

This records the expense for the vacation pay and creates a liability for the amount owed to employees.

To record the pension benefit, you would make the following journal entry:

Debit: Pension Expense $64,000 ($800,000 * 8%)

Credit: Pension Payable $64,000

This records the expense for the pension contribution and creates a liability for the amount owed to the plan administrator.