The following information is provided regarding a company's pension plan:Service cost$640,000Projected benefit obligation, Jan. 14,500,000Fair value plan assets, Jan. 13,750,000Amortization of unrecognized prior service cost for the year250,000Interest cost8%Employer contribution to fund845,000Expected (and actual) return on plan assets10% Required: Prepare the December 31 journal entry to record pension expense.

Interest on projected benefit obligation = Projected benefit obligation, Jan. 1 × Interest cost =…

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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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The following information is provided regarding a company's pension plan:

Service cost	$640,000
Projected benefit obligation, Jan. 1	4,500,000
Fair value plan assets, Jan. 1	3,750,000
Amortization of unrecognized prior service cost for the year	250,000
Interest cost	8%
Employer contribution to fund	845,000
Expected (and actual) return on plan assets	10%

Required:

Prepare the December 31 journal entry to record pension expense.

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