On January 1, 2018, James Rental instituted a defined benefit pension plan for its employees. The annual service cost for each year of 2018 and 2019 was $600,000. The interest rate used to determine the projected benefit obligation is 10%. Both the actual and the expected return on plan assets are 8% for both years. James funded the plan in the amount of $400,000 each January 1, beginning on January 1, 2018.

What pension liability should James report in its balance sheet for the year ended December 31, 2019?