Question: Jan Corp. amended its defined benefit pension plan, granting a total credit of $100,000 to four employees for services rendered prior to the plans adoption.

Jan Corp. amended its defined benefit pension plan, granting a total credit of $100,000 to four employees for services rendered prior to the plan’s adoption. The employees, A, B, C, and D, are expected to retire from the company as follows:

A will retire after three years.

B and C will retire after five years.

D will retire after seven years.

What is the amount of prior service cost amortization in the first year?

a. $0

b. $ 5,000

c. $20,000

d. $25,000

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