The Spangler Company has just entered into a pension plan for the first time as a result of union contract negotiations. The plan became effective as of January 1, 19-. On December 31, 19-, only two entries have been made on the books of the company. The first entry (a debit to Retained Earnings and a credit to Cash in the amount of $5,000) was the first of a series of five equal annual payments required to be made to an insurance company to cover the cost of pensions based on past services. The second entry was a debit to Factory Overhead Control and a credit to Cash in the amount of $3,000 to cover the current year's contribution to the insurance company for pension costs based on the current year's factory wages. Did the two entries reflect properly the facts relative to the pension plan? Present your reasoning and describe any changes which you conclude are needed.