Pension Expense Different Than Funding: Multiple Years Baron Company adopted a defined benefit pension plan on January 1, 2006. The following information pertains to the pension plan for 2007 and 2008:
|
2007 |
2008 |
|
|
Service cost |
$160,000 |
$172,000 |
|
Projected benefit obligation (1/1) |
120,000 |
289,600 |
|
Plan assets (1/1) |
120,000 |
279,600 |
|
Company contribution (funded 12/31) |
150,000 |
160,000 |
|
Discount rate |
8% |
8% |
|
Expected long term (and actual) rate of return on plan assets |
8% |
8% |
There are no other components of Baron Company’s pension expense.
Required
1. Compute the amount of Baron Company’s pension expense for 2007 and 2008.
2. Prepare the journal entries to record the pension expense for 2007 and 2008.