Merciful Industries Has a Beginning PBO Balance of $500,000 and a Settlement

Merciful Industries has a beginning PBO balance of $500,000 and a settlement rate of 7%. As a result of an amendment to the current union contract, there are prior service costs of $46,500. What is the journal entry to record amortization of the prior service costs for the second year, assuming that the company uses a 5-year amortization period?

A) $$\begin{array} { | l | r | r | } \hline \text { Pension Expense } & 3,255 & \\\hline \text { Projected Benefit Obligation } & & 3,255 \\\hline\end{array}$$
B) $$\begin{array} { | l | r | r | } \hline \text { Pension Expense } & 35,000 & \\\hline \text { Other Comprehensive Income } & & 35,000 \\\hline\end{array}$$
C) $$\begin{array} { | c | r | r | } \hline \text { Other Comprehensive Income-Prior Service Costs } & 9,300 & \\\hline \text { Projected Benefit Obligation } & & 9,300 \\\hline\end{array}$$
D) $$\begin{array} { | l | r | r | } \hline \text { Pension Expense } & 9,300 & \\\hline \begin{array} { l } \text { Other Comprehensive Income-Prior Service } \\\text { Costs }\end{array} & & \\\hline\end{array}$$