On January 1, 2010, the Vasby Software Company adopted a healthcare plan for its retired employees. To determine eligibility for benefits, the company retroactively gives credit to the date of hire for each employee. The service cost for 2010 is $8,000. The plan is not funded, and the discount rate is 10%. All employees were hired at age 28 and become eligible for full benefits at age 58. Employee C was paid $7,000 for postretirement healthcare benefits in 2010. On December 31, 2010, the accumulated postretirement benefit obligation for Employees B and C were $77,000 and $41,500, respectively. Additional information on January 1, 2010 is as follows:

Required
1. Compute the OPEB expense for 2010 if the company uses the average remaining service life to amortize the prior service cost.
2. Prepare all the required journal entries for 2010 if the plan is notfunded.

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Accumulated Postretirement Benefit Obligation Employee Status A Employee B Employee C Retired Expected Retirement Age 65 65 Age 31 $ 14,000 70,000 45,000 $129,000 67