FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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The following data are available pertaining to Household Appliance Company's retiree health care plan for 2021:
 

   
Number of employees covered   2  
Years employed as of January 1, 2021   3 [each]
Attribution period   20 years
Expected postretirement benefit obligation, Jan. 1 $ 60,000  
Expected postretirement benefit obligation, Dec. 31 $ 63,000  
Interest rate   5 %
Funding   none  
 

 
Required:
1. What is the accumulated postretirement benefit obligation at the beginning of 2021?
2. What is interest cost to be included in 2021 postretirement benefit expense?
3. What is service cost to be included in 2021 postretirement benefit expense?
4. Prepare the journal entry to record the postretirement benefit expense for 2021.

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