On December 31, 2019, Palmer Company determined that the 2019 service cost on its defined benefit pension
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Question:
On December 31, 2019, Palmer Company determined that the 2019 service cost on its defined benefit pension plan was $120,000. At the beginning of 2019, Palmer had pension plan assets of $510,000 and a projected benefit obligation of $700,000. Its discount rate (and expected long-term rate of return on plan assets) for 2019 was 10%. There are no other components of Palmer's pension expense; the company had an accrued/prepaid pension cost liability at the end of 2018.
1. | Compute the amount of Palmer's pension expense for 2019. |
2. | Prepare the journal entry to record Palmer's 2019 pension expense if it funds the pension plan in the amount of (a) $139,000 and (b) $120,000. |
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