Journal entry to record pension-related amounts

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Reference no: EM13144580

On January 1, 2010, Cunningham Company has the following definedbenefit pension plan balances.  Projected benefits 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, 2011, the company amends its pension agreement so that service costs of $500,000 are created. Other data related to the pension plan are as follows:

2010 2011

Service costs $150,000 $180,000

Prior service costs 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%

b) For 2011, prepare the journal entry to record pension-related amounts.

Account title Amount

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Account title Amount

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Reference no: EM13144580

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