On January 1, 2016, Parkway Company adopted a defined benefit pension plan. At that time, Parkway awarded retroactive benefits to its employees, resulting in a prior service cost of $2,180,000 on that date (which it did not fund). Parkway decided to amortize this cost by the straight-line method over the 16 year average remaining service life of its active participating employees. Parkway's actuary and funding agency have also provided the following additional information for 2016 and 2017:

2016 2017 Service cost $ 340,000 $ 348,000 Projected benefit obligation (1/1] 2,180,0001 2,738,000 Plan assets (1/1] 670,000 Discount rate 10% 10 Expected long-term (and aduall rate of return on plan assets