entries Peyton will need to account for the depreciation as well as the

Entries peyton will need to account for the

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entries, Peyton will need to account for the depreciation as well as the interest expense and enter those accordingly. A capital lease can help the business lower their taxable income as the costs are classified as expenses. Peyton Approved offers great post-retirement benefits such as a pension plan and health insurance. The company currently has about 60 individuals that are employed. It is estimated that there is a pension liability for the company in the amount of $107,041.70 along with a health insurance liability of $43,718.51 for those already retired. As more employees are hired and more reach the age of retirement, that liability and expense will increase. This liability is also increased due to service and interest costs. The service costs are the “actuarial present value of the expected post-employment benefit obligation attributed to services of the employees during the current period” (Whalen, Jones and Pagach, 2017). The interest costs are the increase in the accumulated obligation due to the passage of time (Whalen, Jones and Pagach, 2017). On the
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financial records, the pension expense and health insurance expense help to lower the taxable income for the company.
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References Whalen, J., Jones, J. and Pagach, D. (2017). Intermediate Accounting: Reporting and Analysis . 2nd ed. [ebook] Boston.
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