Preheat oven to 350°F. Cream butter and cream cheese - add sugar and egg yolk. Beat until smooth. Add flour and vanilla. Mix until blended.
Roll cookies into walnut sized balls and place on ungreased cookie sheets. Top each cookie with a whole cherry - pressing cherry into cookie to keep in place. All cookies can be placed on a single cookie sheet as these do not spread out.
Bake 12 to 15 minutes. Store cookies in the refrigerator. Enjoy!