Kemp Company provides a defined benefit postretirement plan for its employees. Kemp adopted the plan on January 1, 2006, in accordance with the provisions of SFAS 106, Employer’s Accounting for Postretirement Benefits other than Pensions. Data relating to the pension plan for 2006 are as follows:


Service cost for 2006


Interest on the accumulated postretirement benefit obligation


Amortization of the unrecognized transition obligation


At the end of 2006, Kemp makes a benefit payment of $10,000 to employees. In its December 31, 2006 balance sheet, Kemp should record accrued postretirement benefit cost of

  1. $35,000
  2. $31,000
  3. $51,000
  4. $15,000