Make the journal entries to record the pension expense

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Reference no: EM131796050

Problem - Silver Company sponsors a defined benefit pension plan. The following information related to the pension plan is available for 2007 and 2008.


2007

2008

Plan assets (fair value), December 31

$699,000

$849,000

Projected benefit obligation, January 1

700,000

800,000

Pension asset/liability, January 1

(140,000)

?

Prior service cost, January 1

250,000

240,000

Service cost

60,000

90,000

Actual and expected return on plan assets

24,000

30,000

Amortization of prior service cost

10,000

12,000

Contributions (funding)

115,000

120,000

Accumulated benefit obligation, December 31

500,000

550,000

Interest/settlement rate

9%

9%

Instructions:                                                                                      

(a) Compute pension expense for 2010 and 2011.                                                                                            

(b) Prepare the journal entries to record the pension expense and the company's funding of the pension plan for both years.

Reference no: EM131796050

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