Recently my former company was sold to a different company. All employees were terminated and rehired the same day of aquisition. The former company believes it does not have to pay accrued vacation benefits since they say they "transfered" these days to the new company. I am under the assumption that all accrued vacation is payable on the next regularly scheduled paycheck. This assumption comes from what I believe is Iowa code and past practice. I also assume that whether or not I recieved vacation from my new employer it is immaterial to the question of what my former employer owes former employees. Under Iowa law, what is the correct answer?

Iowa law does not require the unconditional payment of vacation at termination, only that the employer must comply with its own policy. If the agreement between the companies was that your accrued vacation was to be transferred to the new company, that is most probably perfectly legal.