The following information is available for the pension plan of Vaughn Company for the year 2020. Actual and expected return on plan assets $ 14,700 Benefits paid to retirees 40,800 Contributions (funding) 81,100 Interest/discount rate 10 % Prior service cost amortization 7,600 Projected benefit obligation, January 1, 2020 458,000 Service cost 63,900 Prepare the journal entry to record pension expense and the employer’s contribution to the pension plan in 2020. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Account Titles and Explanation Debit Credit enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount
The following information is available for the pension plan of Vaughn Company for the year 2020. Actual and expected return on plan assets $ 14,700 Benefits paid to retirees 40,800 Contributions (funding) 81,100 Interest/discount rate 10 % Prior service cost amortization 7,600 Projected benefit obligation, January 1, 2020 458,000 Service cost 63,900 Prepare the journal entry to record pension expense and the employer’s contribution to the pension plan in 2020. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Account Titles and Explanation Debit Credit enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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The following information is available for the pension plan of Vaughn Company for the year 2020.
| Actual and expected return on plan assets | $ 14,700 | ||
| Benefits paid to retirees | 40,800 | ||
| Contributions (funding) | 81,100 | ||
| Interest/discount rate | 10 | % | |
| Prior service cost amortization | 7,600 | ||
| Projected benefit obligation, January 1, 2020 | 458,000 | ||
| Service cost | 63,900 |
Prepare the
|
Account Titles and Explanation
|
Debit
|
Credit
|
|---|---|---|
|
enter an account title
|
enter a debit amount
|
enter a credit amount
|
|
enter an account title
|
enter a debit amount
|
enter a credit amount
|
|
enter an account title
|
enter a debit amount
|
enter a credit amount
|
|
enter an account title
|
enter a debit amount
|
enter a credit amount
|
Expert Solution
Step 1
Solution:-
Preparation of the journal entry to record pension expense and the employer’s contribution to the pension plan in 2020 as follows under:-
Note:-
Calculation of pension expenses for 2020
| Service Cost | $63,900 |
| Interest Cost ($458,000 * 10%) | $45,800 |
| Actual (expected) return on plan assets | ($14,700) |
| Unrecognized prior service cost amortization | $7,600 |
| Pension expense for 2020 | $102,600 |
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