Question

Pina Company provides the following information about its defined benefit pension plan for the year 2020.

Service cost		$90,900
Contribution to the plan		103,000
Prior service cost amortization		9,300
Actual and expected return on plan assets		63,200
Benefits paid		39,800
Plan assets at January 1, 2020		648,600
Projected benefit obligation at January 1, 2020		706,600
Accumulated OCI (PSC) at January 1, 2020		148,800
Interest/discount (settlement) rate		10	%

Prepare the journal entry recording pension expense. (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.)

Answer 1

Computation of pension expense

Service cost		90900
Interest cost		70660	706600*10%
Actual (expected) return on plan assets	-63200
Unrecognized prior service cost amortization	9300
Pension expense for 2020	107660

Particulars		DR	Cr
Pension Expense		107660
Cash			103000
Other Comprehensive Income (PSC)			9300
Pension Asset/Liability		4640
		(balancing figure)

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