Hayward City maintains a dened benet pension plan for its employees. In a recent year the city

Hayward City maintains a defined benefit pension plan for its employees. In a recent year the city contributed $5 million to its pension fund. However, its annual pension cost as calculated by its actuary was $7 million. The city accounts for the pension contributions in a governmental fund.
1. Record the pension expenditure in the appropriate fund.
2. Suppose in the following year the city contributed $6 million to its pension fund, but its annual pension cost per its actuary was only $5 million. Prepare the appropriate journal entries.
3. In which fund, if any, would the excess of pension cost over pension contribution be recorded?