Aykroyd Inc. has sponsored a non-contributory, defined benefit pension plan for its employees since 1992. Relevant information about the pension plan on January 1, 2022, is as follows.

1. The company has 200 employees. All these employees are expected to receive benefits under the plan.

2. The defined benefit obligation amounted to $5,000,000, and the fair value of pension plan assets was $3,000,000. There is a zero balance in Accumulated Other Compensive Income related to the pension.

On December 31, 2022, the defined benefit obligation and the vested benefit obligation were $4,850,000 and $4,025,000, respectively. The fair value of the pension plan assets amounted to $4,100,000 at the end of the year. A 10% discount rate was used in the actuarial present value computations in the pension plan. The present value of benefits attributed by the pension benefit formula to employee service in 2022 amounted to $200,000. The employer’s contribution to the plan assets amounted to $775,000 in 2022. This problem assumes no payment of pension benefits.

Instructions
a. Compute pension expense for the year 2022.

b. Prepare the journal entries required to report the accounting for the company’s pension plan for 2022.

c. Compute the amount of the increase/decrease in net gains or losses in 2022.