Surf School Ltd has six employees who are entitled to long-service leave (LSL). The LSL can be taken after 10 years of service, at which time the employee is entitled to 13 weeks’ leave. Entitlements to payment on departure arise after eight years of service. The following information about the employees is available:

Employees’ salaries are expected to increase by 2.5 percent per annum. The opening balance of the LSL provision was $32 500, and the interest rate for corporate bonds for all relevant periods to maturity was 8 percent at the beginning of the year.

REQUIRED

What is the accounting journal entry to record LSL expense for the current period (round amounts to the nearest dollar)?

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No. employees per employee of Current salary Years of Probability (%) that Periods to service LSL will be paid maturity 222 50 000 65 000 70 000 6 7 8 45 70 100 4 3 2 High-quality corporate bond rate (%) 9 7 6