The Verna Company has had a defined benefit pension plan for several years. At the end of 2007 the company accumulated the following information:

(1) Service cost for 2007, $127,000;

(2) Projected benefit obligation, 1/1/2007, $634,000;

(3) Discount rate, 9%;

(4) Plan assets, 1/1/2007, $589,000; and

(5) Expected long-term rate of return on plan assets, 9%. There are no other components of Verna Company’s pension expense; the company had a prepaid/accrued pension cost liability at the end of 2006. The company contributed $128,000 to the pension plan at the end of 2007.

Required

Compute the amount of Verna Company’s pension expense for 2007 and prepare the related journal entry.