On January 1, 2013, Flash and Dash 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 following information is available about the plan:

Service cost .....................................................................$ 30,000

Accumulated postretirement benefit obligation (1/1/13) ................. 100,000

Accumulated postretirement benefit obligation for employees

fully eligible to receive benefits (12/31/13) ................................ 40,000

Expected return on plan assets ...............................................0

Prior service cost ............................................................... 12,000

Payments to retired employees during 2013 ................................ $ 5,000

Interest rate ..................................................................... 10%

Average remaining service period of active plan participants (1/1/13).. 12 years

Required:

1. Compute the OPRB expense for 2013 if the company uses the average remaining service life to amortize the prior service cost.

2. Prepare all the required journal entries for 2013 if the plan is not funded.