Reference no: EM132678581

The Mai Anh Tong Company began operations on January 1, 20X7. It employs forty individuals who work eight-hour days and are paid hourly. Each employee earns 15 paid vacation days and 10 paid sick days annually. Vacation days may be taken after January 15 of the year following the year in which they are earned. Sick days may be taken as soon as they are earned; unused sick days accumulate.

Additional information is as follows:

Actual Hourly            Vacation Days Used                  Sick Days Used
Wage Rate                by Each Employee                  by Each Employee


20X7     20X8           20X7           20X8                    20X7            20X8
$8.00    $9.00             0              12                       6               8

• The Mai Anh Tong Company has chosen to accrue the cost of compensated absences at rates of pay in effect during the period when earned and to accrue sick pay when earned.

Required

Problem 1: Prepare journal entries to record transactions related to compensated absences during 20X7 and 20X8.