Indigo Company provides the following information about its defined benefit pension plan for the year 2020. Service cost   $91,000   Contribution to the plan   104,000   Prior service cost amortization   9,400   Actual and expected return on plan assets   62,900   Benefits paid   39,900   Plan assets at January 1, 2020   630,400   Projected benefit obligation at January 1, 2020   701,800   Accumulated OCI (PSC) at January 1, 2020   153,000   Interest/discount (settlement) rate   10 % (b)     Prepare the journal entry recording pension expense. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Account Titles and Explanation Debit Credit enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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5b.

Indigo Company provides the following information about its defined benefit pension plan for the year 2020.

Service cost   $91,000  
Contribution to the plan   104,000  
Prior service cost amortization   9,400  
Actual and expected return on plan assets   62,900  
Benefits paid   39,900  
Plan assets at January 1, 2020   630,400  
Projected benefit obligation at January 1, 2020   701,800  
Accumulated OCI (PSC) at January 1, 2020   153,000  
Interest/discount (settlement) rate   10 %

(b)

 
 
Prepare the journal entry recording pension expense. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Account Titles and Explanation
Debit
Credit
enter an account title
enter a debit amount
enter a credit amount
enter an account title
enter a debit amount
enter a credit amount
enter an account title
enter a debit amount
enter a credit amount
enter an account title
enter a debit amount
enter a credit amount
Expert Solution
Step 1

SOLUTION

 CALCULATION OF PENSION EXPENSE-.

SERVICE COST 91000
INTERST COST (701800*10%) 70180
EXPECTED RETURN ON PLAN ASSETS  (62900)
PRIOR SERVICE COST AMORTISATION  9400
PENSION EXPENSE 107680
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