Farley Incorporated Instituted a Defined Benefit Pension Plan for Its

Essay

Farley Incorporated instituted a defined benefit pension plan for its employees at the beginning of 2013. An actuarial method that is acceptable under GAAP indicates that the company should contribute $80,000 each year to the pension fund to cover the benefits that will be paid to the employees. Farley funded 80% in 2013 and 2014, 90% in 2015 and 2016, and 100 percent in 2017.
Required:
(1) Prepare the journal entries to accrue the pension liability and fund it for 2013 through 2017.
(2) Compute the balance in the pension liability account as of December 31, 2017.