Riley Company promises to pay Janet Anderson or her estate $150,000 per year for the next 10 years, even if she leaves the company or passes away to try to induce her to stay with the company. Riley Company wants to properlyrecord this transactionasdeferred compensationbut is unsure how to record the cost. In addition, Riley Company purchased awhole life insurancepolicy for Janet, naming the company as thebeneficiary. Reed Company wants to determine if it can offset thecash surrender valueof the life insurance policy against the deferred compensation liability.

Organize and interpret the findings