Baron Company adopted a defined benefit pension plan on January 1, 2018. The following information pertains to the pension plan for 2019 and 2020: 20192020Service cost$150,000$160,000Projected benefit obligation (1/1)112,500269,250Plan assets (1/1)112,500273,750Company contribution (funded 12/31)154,500170,000Discount rate6%6%Expected long-term (and actual) rate of return on plan assets6%6% There are no other components of Baron’s pension expense. Required:1.Compute the amount of Baron’s pension expense for 2019 and 2020.2.Prepare the journal entries to record the pension expense for 2019 and 2020.

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Answered: 1. Compute the amount of Baron’s…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Baron Company adopted a defined benefit pension plan on January 1, 2018. The following information pertains to the pension plan for 2019 and 2020:

	2019	2020
Service cost	$150,000	$160,000
Projected benefit obligation (1/1)	112,500	269,250
Plan assets (1/1)	112,500	273,750
Company contribution (funded 12/31)	154,500	170,000
Discount rate	6%	6%
Expected long-term (and actual) rate of return on plan assets	6%	6%

There are no other components of Baron’s pension expense.

Required:

1.	Compute the amount of Baron’s pension expense for 2019 and 2020.
2.	Prepare the journal entries to record the pension expense for 2019 and 2020.

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