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25 August, 17:41

Martin Services Company provides their employees vacation benefits and a defined contribution pension plan. Employees earned vacation pay of $39,500 for the period. The pension plan requires a contribution to the plan administrator equal to 9% of employee salaries. Salaries were $750,000 during the period. a. Provide the journal entry for the vacation pay. b. Provide the journal entry for the pension benefit.

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  1. 25 August, 17:47
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    a. Provide the journal entry for the vacation pay

    Employees earned vacation pay of $39,500 for the period.

    Debit Credit

    Vacation pay expense A/C $39,500

    Vacation payable A/C $39,500

    (Being vacation pay accrued for periods)

    b. Provide the journal entry for the pension benefit.

    9% of employee salaries and the salaries were $750,000

    => The pension plan requires a contribution to the plan administrator: $750,000*9% = $67,500

    Debit Credit

    Pension expense $750,000

    To cash A/C $67,500

    To unfunded pension liabilities $683,500

    Hope it will find you well.
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