Chapter 20, Problem 11E

To determine

Pension expense: A fixed sum of money, receivable in future or after the age of retirement, which the beneficiary has invested during the period of employment is termed as pension. The pension expense is the amount of expense incurred during a specific year for the purpose of pension contribution, creation and maintenance of fund.

(a)

To determine the pension expense for the year 2017.

Given information:

Projected benefit obligation is $900,000.

Rate of interest is 9%.

To determine

(b)

To record: To record the journal entry for the pension expense 2017.

To determine

(c)

To determine the amounts to be recorded in the income statement and the balance sheet 2017.