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.