A business provides its employees with varying amounts of vacation per year, depending on the length of employment. The estimated amount of the current year's vacation pay is $42,000.

a-Journalize the adjusting entry required on January 31, the end of the first month of the current year, to record the accrued vacation pay.

b-How is the vacation pay reported on the company's balance sheet? When is this amount removed from the company's balance sheet?