Hi Hopeful,

You may want to double confirm where this debit balance (negative) of Vacation Payable comes from by going to  each employee record, Income tab and check vacation owed.  It can be from 1 employee or more than 1 employee.

After you figure out which employee has the negative vacation amount, you can do an adjustment paycheque by selecting this employee and zero out everything first.  Next, make the paycheque "Enter Taxes Manually".  Then, go to Vacation tab, key in an amount to make Vacation Owed zero.  The entry will credit Vacation Payable and debit Wage Expenses.

Hope this helps.  

Thanks very much Keith L.  I am aware it's for one employee, but has gone back several years...would there be something else I should do to show that some of the payable is from previous years?  

Hi Hopeful,

No, you do not have to.   All you have to do is to follow the suggestion from the my previous post and adjust the vacation payable amount back to zero.

Hope this helps.