Reference no: EM132431164

Problem: Waterway Company sponsors a defined benefit pension plan for its employees. The following data relate to the operation of the plan for the year 2017 in which no benefits were paid.

1. The actuarial present value of future benefits earned by employees for services rendered in 2017 amounted to $55,400.

2. The company's funding policy requires a contribution to the pension trustee amounting to $134,684 for 2017.

3. As of January 1, 2017, the company had a projected benefit obligation of $899,800, an accumulated benefit obligation of $793,400, and a debit balance of $403,800 in accumulated OCI (PSC). The fair value of pension plan assets amounted to $600,600 at the beginning of the year. The actual and expected return on plan assets was $54,400. The settlement rate was 8%. No gains or losses occurred in 2017 and no benefits were paid.

4. Amortization of prior service cost was $50,300 in 2017. Amortization of net gain or loss was not required in 2017.

Prepare the journal entry or entries to record pension expense and the employer's contribution to the pension trustee in 2017. (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.)

Account Titles and Explanation

Debit

Credit