(Pension Expense, Journal Entries for 2 Years) Gordon Company sponsors a defined benefit pension plan. The following information related to the pension plan is available for 2012 and 2013.
|
2012 |
2013 |
|
|
Plan assets (fair value), December 31 |
$699,000 |
$849,000 |
|
Projected benefit obligation, January 1 |
700,000 |
800,000 |
|
Pension asset/liability, January 1 |
140,000 Cr. |
? |
|
Prior service cost, January 1 |
250,000 |
240,000 |
|
Service cost |
60,000 |
90,000 |
|
Actual and expected return on plan assets |
24,000 |
30,000 |
|
Amortization of prior service cost |
10,000 |
12,000 |
|
Contributions (funding) |
115,000 |
120,000 |
|
Accumulated benefit obligation, December 31 |
500,000 |
550,000 |
|
Interest/settlement rate |
9% |
9% |
Instructions
(a) Compute pension expense for 2012 and 2013.
(b) Prepare the journal entries to record the pension expense and the company’s funding of the pension plan for both years.