Co. began operations on January 2, 2019. It employs 15 people who work 8-hour days. Each employee earns 12 paid vacation days annually. Vacation days may be taken after January 10 of the year following the year in which they are earned. The average hourly wage rate was $24 in 2019 and $28 in 2020. The average vacation days used by each employee in 2020 was 10. Co. accrues the cost of compensated absences at rates of pay in effect when earned.

Prepare journal entries to record the transactions related to paid vacation days during 2019 and 2020

Compute the amounts of any liability for compensated absences that should be reported on the balance sheet at December 31, 2020