Merciful Industries Has a Beginning PBO Balance of $600,000 and a Settlement

Merciful Industries has a beginning PBO balance of $600,000 and a settlement rate of 6%. As a result of an amendment to the current union contract, there are prior service costs of $52,000. What is the journal entry to record interest expense on the pension obligation?

A) $\begin{array}{|l|r|r|} \hline \text { Pension Expense } & 39,120\\\hline \text { Projected Benefit Obligation } & &39,120\\\hline\end{array}$

B) $\begin{array}{|l|r|r|} \hline \text { Pension Expense} & 36,000\\\hline \text { Other Comprehensive Income} & &36,000\\\hline \end{array}$

C) $$\begin{array} { |l | r | r | } \hline \text { Pension Expense } & 130,400 & \\\hline \text { Projected Benefit Obligation } & & 130,400 \\\hline\end{array}$$
D) $$\begin{array} { | l | r | r | } \hline \text { Pension Expense } & 48,880 & \\\hline \text { Other Comprehensive Income } & & 48,880 \\\hline\end{array}$$