Reference no: EM132663001
Question - Baron Company adopted a defined benefit pension plan on January 1, 2015. The following information pertains to the pension plan for 2016 and 2017:
2016 2017
Service cost $120,000 $130,000
Projected benefit obligation (1/1) 90,000 219,000
Plan assets (1/1) 90,000 223,000
Company contribution (funded 12/31) 124,000 140,000
Discount rate 10% 10%
Expected long-term (and actual) rate of return on plan assets 10% 10%
There are no other components of Baron's pension expense.
Required -
1. Compute the amount of Baron's pension expense for 2016 and 2017.
2. Prepare the journal entries to record the pension expense for 2016 and 2017.