Prepare potato lid journal entries for the year

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Reference no: EM132806537

Potato Lid. is a public company and has a defined benefit pension plan. The following information relates to the plan for the year ending December 31, 2018.

Pension benefits paid to retirees during 2018 28,000

Current service cost for 2018 13,400

Funding contribution on 1 April 2018 14,000

Pension plan assets fair value, 31 December 2017 156,000

Actual return on plan assets for 2018 6,400

Past service cost granted in 2018 7,400

Actuarial gain incurred in 2018 5,000

Defined benefit obligation, 31 December 2017 212,000

Long-term interest rate on corporate bonds 7%

REQUIRED:

Problem 1: Indicate the three elements of pension accounting, and prepare Potato Lid.'s journal entries for the year ending December 31, 2018 as required under each specific element. Prepare also the journal entry for the contribution to the pension fund during 2018.

Reference no: EM132806537

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