Instructions

Example $6-12$

The employees of Parma Company are entitled to one day's vacation for each month worked. The average daily pay for each of the $50$ employees is $$130.$ The adjusting entry to record the vacation expense of $$6,500($$$13050)$ at the end of each month is:

Vacation Benefits Expense

$6,500\mathrm{.}00$

Vacation Benefits Payable

$6,500\mathrm{.}00$

At the end of April, Hernaldez Company had a balance of $$36,230$ in the vacation benefits payable account. During May, employees earned an additional $$2,740$ in vacation benefits, but some employees used vacation days that amounted to $$2,060$ of the vacation benefits. The $$2,060$ was charged to Wages Expense when it was paid in May. What adjusting entry would Hernandez Company make at the end of May to bring the vacation benefits payable account up to date?