I presume you are setting up a 457(f) account for you employee and a employee contributes it from his salary.
The entry would be --- when salary is paid, (the figures mentioned are just illustrations)
Salary account DR 120 $
TO Cash / Bank 100$
TO 457(f) A/c 20$
This way the salary entry is complete and the 457(f) stands in credit of $ 20.
When this needs to be setteled / paid in future, the entry would be
457(f) A/c DR $20
TO Bank / Cash A/c $20
This would complete the transaction.
I hope the above helps...
Actually no---the employee is not deferring income from his salary (paycheck) but rather the employer is purchasing upfront an annuity and the earnings on this annuity (deposit) years down the road is provided to the employee (at retirement) and the original deposit reverts back to the employer So while I understand that the entry (entries) on a monthly (or quarterly ??) basis for interest (or investment earnings) received on the annuity would be:
Dr. Annuity Purcahsed (457(f) Account)
Cr Liabilty for Deferred Account ( 457(f) ) "earnings"...............
My question (concern) is....is there an INITIAL entry that needs to be set up for this future liabilty (the payout of accrued earnings through the years) ..SINCE..SINCE the EMPLOYER actually owns the annuity and NOT the employee like in a "normal" salary deferral situation (as you illustrated) ..(ie. 401K deferrals, 457 (b) deferrals, etc)
I understand now.
The intial entry should be as under:
(Here again the figures are for illustration purpose only)
When you purchase the annuity,
457(f) Annuity Purchased A/c DR $100
Interest Accrued (PAYABLE) A/c DR $20 (Interest that will be payable in the future)
TO Bank/Cash A/c $120
This will complete the entry in your books with the interest accured entered in the beginning.
This should help. However, if you have any other pattern of transaction, you can describe here in paragraph and I shall put the entry for you.
Never hesistate to get back to me anytime...