The following information is available for the pension plan of Radcliffe Company for the year 2017. Actual and expected rate of return on plan assets $ 15,000 Benefits paid to retirees 40,000 Contributions (funding) 90,000 Interest/discount rate 10% Prior service cost amortization $ 8,000 Projected benefit obligation, January 1, 2017 500,000 Service cost 60,000 Instructions: (a) Compute pension expense for the year 2017. Computation of pension expense: (b) Prepare the journal entry to record pension expense and the employer's contribution to the pension plan in 2017. Debit Credit
a | ||
Service cost | 60000 | |
Interest cost | 50000 | =500000*10% |
Expected return on plan assets | -15000 | |
Prior service cost amortization | 8000 | |
Pension expense for the year 2017. | 103000 | |
b | ||
Debit | Credit | |
Pension Expense | 103000 | |
Cash | 90000 | |
Pension Asset/Liability | 5000 | |
Other Comprehensive Income (PSC) | 8000 |
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