Shelby Company instituted a defined-benefit pension plan for its employees at the beginning of 1992. An actuarial method that is acceptable under generally accepted accounting principles indicates that the company should contribute $40,000 each year to the pension fund to cover the benefits that will be paid to the employees. Shelby funded 80 percent ofthe liability in 1992 and 1993, 90 percent in 1994 and 1995, and 100 percent in 1996. REQUIRED:

a. Prepare the journal entries to accrue the pension liability and fund it for 1992, 1993, 1994, 1995, and 1996.

b. Compute the balance in the Pension Liability account as of December 31, 1996.