Postretirement Benefits

Peyton Approved has revised its postretirement plan. It will now provide health insurance to retired employees. Management has requested that you report the short- and long-term financial implications of this.

The company is currently employing 60, and actuaries estimate that the company has a pension liability of $107,041.70. The estimated cost of retired employees health insurance is $43,718.91. Prepare adjusting entries for the pension liability and the health insurance liability.