The Donna Company adopted a defined benefit pension plan on January 1, 2019, and prior service credit
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Question:
- The Donna Company adopted a defined benefit pension plan on January 1, 2019, and prior service credit was granted to employees. As of January 1, 2019, the prior service cost is $68,250. The unrecognized prior service cost is amortized by the straight-line method over the remaining 15-year service life of the company's active employees. Funding for the pension plan was $170,745 and $186,933 at December 31, 2019 and 2020, respectively.
- 2019 2020
- Annual service cost $161,877 $178,065
- Discount (interest) rate 8% 8%
- Expected (and actual) return on plan assets 10% 10%
- Required:
Prepare the journal entries to record net periodic pension expense and the funding as of December 31, 2019 and 2020. Show computations and round answers to the nearest dollar.
Related Book For
Intermediate Accounting
ISBN: 978-0324300987
10th Edition
Authors: Loren A Nikolai, D. Bazley and Jefferson P. Jones
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