(2 Year Worksheet) On January 1, 2012, Harrington Company has the following defined benefit pension plan balances.

Projected benefit obligation

$4,500,000

Fair value of plan assets

4,200,000

The interest (settlement) rate applicable to the plan is 10%. On January 1, 2013, the company amends its pension agreement so that prior service costs of $500,000 are created. Other data related to the pension plan are as follows.

2012

2013

Service cost

$150,000

$180,000

Prior service cost amortization

–0–

90,000

Contributions (funding) to the plan

240,000

285,000

Benefits paid

200,000

280,000

Actual return on plan assets

252,000

260,000

Expected rate of return on assets

6%

8%

Instructions

(a) Prepare a pension worksheet for the pension plan for 2012 and 2013.

(b) For 2013, prepare the journal entry to record pension related amounts.