Waterway Company began operations on January $2,2025.$ It employs $9$ individuals who work $8-$hour days and are paid hourly. Each

employee earns $10$ paid vacation days and $6$ paid sick days annually. Vacation days may be taken after January $15$ of the year following

the year in which they are earned. Sick days may be taken as soon as they are earned; unused sick days accumulate. Additional

information is as follows.

Waterway Company has chosen to accrue the cost of compensated absences at rates of pay in effect during the period when earned

and to accrue sick pay when earned.

Prepare journal entries to record transactions related to compensated absences during $2025$ and $2026.($If no entry is required,

select $"$No Entry" for the account titles and enter $0$ for the amounts. Credit account titles are automatically indented when amount is

entered. Do not indent manually. List all debit entries before credit entries.$)$

Date Account Titles and Explanation

$2025$

Salaries and Wages Expense

Salaries and Wages Expense

$($To accrue the expense and liability for vacations$)$

$($To accrue the expense and liability for sick pay$)$

$($To record payment for compensated time when used by

employees$)$

Debit

Credit

Credit$($To accrue the expense and liability for vacations$)$

$|$

$($To accrue the expense and liability for sick pay$)$

Salaries and Wages Payable

$($To record vacation time paid$)$

$($To record sick leave paid$)$