LetsGo Inc. sponsors a defined benefit plan and determined that for the current year of 2020, service cost was $400,000, amortization of prior service cost was $2,880, interest cost was $33,760, and the expected (and actual) return on plan assets was $28,800. LetsGo will contribute $72,000 to the plan for 2020 and payments to retirees totaled $24,000 in 2020. Record the journal entries for pension expense, to fund the plan, and to pay benefits for 2020. Note: List multiple debits (when applicable) in alphabetical order and list multiple credits (when applicable) in alphabetical order. Date Account Name Dr. Cr. Dec. 31, 2020 CashPlan AssetsAccrued Pension LiabilityProjected Benefit ObligationOCI—Pension Gain/LossOCI—Prior Service CostPension Expense CashPlan AssetsAccrued Pension LiabilityProjected Benefit ObligationOCI—Pension Gain/LossOCI—Prior Service CostPension Expense CashPlan AssetsAccrued Pension LiabilityProjected Benefit ObligationOCI—Pension Gain/LossOCI—Prior Service CostPension Expense CashPlan AssetsAccrued Pension LiabilityProjected Benefit ObligationOCI—Pension Gain/LossOCI—Prior Service CostPension Expense To record pension expense Dec. 31, 2020 CashPlan AssetsAccrued Pension LiabilityProjected Benefit ObligationOCI—Pension Gain/LossOCI—Prior Service CostPension Expense CashPlan AssetsAccrued Pension LiabilityProjected Benefit ObligationOCI—Pension Gain/LossOCI—Prior Service CostPension Expense To record plan funding Dec. 31, 2020 CashPlan AssetsAccrued Pension LiabilityProjected Benefit ObligationOCI—Pension Gain/LossOCI—Prior Service CostPension Expense CashPlan AssetsAccrued Pension LiabilityProjected Benefit ObligationOCI—Pension Gain/LossOCI—Prior Service CostPension Expense To record benefit payments

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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Recording Pension Expense, Plan Funding, Benefit Payments

LetsGo Inc. sponsors a defined benefit plan and determined that for the current year of 2020, service cost was $400,000, amortization of prior service cost was $2,880, interest cost was $33,760, and the expected (and actual) return on plan assets was $28,800. LetsGo will contribute $72,000 to the plan for 2020 and payments to retirees totaled $24,000 in 2020. Record the journal entries for pension expense, to fund the plan, and to pay benefits for 2020.

Note: List multiple debits (when applicable) in alphabetical order and list multiple credits (when applicable) in alphabetical order.

Date	Account Name	Dr.	Cr.
Dec. 31, 2020	CashPlan AssetsAccrued Pension LiabilityProjected Benefit ObligationOCI—Pension Gain/LossOCI—Prior Service CostPension Expense
	CashPlan AssetsAccrued Pension LiabilityProjected Benefit ObligationOCI—Pension Gain/LossOCI—Prior Service CostPension Expense
	CashPlan AssetsAccrued Pension LiabilityProjected Benefit ObligationOCI—Pension Gain/LossOCI—Prior Service CostPension Expense
	CashPlan AssetsAccrued Pension LiabilityProjected Benefit ObligationOCI—Pension Gain/LossOCI—Prior Service CostPension Expense
	To record pension expense
Dec. 31, 2020	CashPlan AssetsAccrued Pension LiabilityProjected Benefit ObligationOCI—Pension Gain/LossOCI—Prior Service CostPension Expense
	CashPlan AssetsAccrued Pension LiabilityProjected Benefit ObligationOCI—Pension Gain/LossOCI—Prior Service CostPension Expense
	To record plan funding
Dec. 31, 2020	CashPlan AssetsAccrued Pension LiabilityProjected Benefit ObligationOCI—Pension Gain/LossOCI—Prior Service CostPension Expense
	CashPlan AssetsAccrued Pension LiabilityProjected Benefit ObligationOCI—Pension Gain/LossOCI—Prior Service CostPension Expense
	To record benefit payments

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