Data pertaining to the postretirement health care benefit plan of Sterling Properties include the following for 2018:
($ in thousands)
Service cost........................................................................$124
Accumulated postretirement benefit obligation, January 1...................700
Plan assets (fair value), January 1.................................................50
Prior service cost-AOCI........................................................none
Net gain-AOCI (2018 amortization, $1) .......................................91
Retiree benefits paid (end of year) ................................................87
Contribution to health care benefit fund (end of year) .......................185
Discount rate, 7%
Return on plan assets (actual and expected), 10%
Required:
1. Determine the postretirement benefit expense for 2018.
2. Prepare the appropriate journal entries to record the postretirement benefit expense, funding, and retiree benefits for 2018.