Question

create the entry to record the liability entry for Vacation Pay (4% of total wages) and...

create the entry to record the liability entry for Vacation Pay (4% of total wages) and the liability for the company paid benefit of Group Insurance (1% of total wages)

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Answer #1

You have not provided the total wages. I will assume the total wages as say $ 10,000 and proceed to demonstrate the entries. Please check the total wages at your end and use the right figure.

Vacation Pay = 4% of total wages = 4% x 10,000 = $ 4,000

and the liability for the company paid benefit of Group Insurance = 1% of total wages 1% x 10,000 = $ 1,000

Entries will be recorded as shown below:

Vacation Pay

DR Vacation Pay Expense

$400

CR Vacation Pay Liability

$400

Group Insurance

DR Group Insurance Expense

$100

CR Group Insurance Liability

$100
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