Chavez estimated and must expense $7,800 of accrued vacation benefits for the year. (a) Prepare the December 31 year-end adjusting entry for accrued vacation benefits. (b) Prepare the entry on April 1 of the next year when an employee takes a one-week vacation and is paid $800 cash for that week.

A. Dr Dec. 31.Vacation Benefits Expense$7,800

Cr Vacation Benefits Payable $7,800

B. Dr Aprl. 1Vacation Benefits Payable$800

Cr Cash $800

Explanation:

(a) Preparation for the December 31 year-end adjusting entry for accrued vacation benefits.

Dr Dec. 31.Vacation Benefits Expense$7,800

Cr Vacation Benefits Payable $7,800

(Being To record the accrual of vacation benefit for the year)

(b) Preparation for the entry on April 1 of the next year in a situation where an employee takes a one-week vacation and is paid the amount of $800 cash for that week.

Dr Aprl. 1Vacation Benefits Payable$800

Cr Cash $800

(Being To record the payment of vacation benefits for one week)

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