Reference no: EM132719425

The Mai Anh Tong Company began operations on January 1, 20X7. It employs forty individuals who work eight-hour days and are paid hourly. Each employee earns 15 paid vacation days and 10 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:

Actual Hourly         Vacation Days Used               Sick Days Used
Wage Rate             by Each Employee            by Each Employee

20X7         20X8         20X7      20X8          20X7      20X8
$8.00        $9.00         0            12             6            8

• The Mai Anh Tong 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.

Required

Problem 1: Prepare journal entries to record transactions related to compensated absences during 20X7 and 20X8.