Gordon Company sponsors a defined benefit pension plan. The following information related to the pension plan is available for 2015 and 2016.

Instructions

(a) Compute pension expense for 2015 and 2016.

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

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2015 Plan assets (fair value), December 31 Defined benefit obligation, January 1 Pension asset/liability, January 1 $699,000 2016 $849,000 700,000 800,000 140,000 Cr. ? Service cost 60,000 90,000 Actual return on plan assets 24,000 30,000 Contributions (funding) 115,000 120,000 Accumulated benefit obligation, December 31 500,000 550,000 Discount (interest) rate 9% 9%