Pension Plan Calculations and Journal Entries
on January 1, 2020

Pension plan calculations and journal entries
On January 1, 2020, Prune Ltd. reported the following balances relating to their defined benefit pension plan: $\begin{array}{lrrr}\quad\quad\text{ Defined benefit obligation }........................................... & \$ 3,200,000 \\\quad\quad\text{ Fair value of plan assets } .............................................& 3,200,000 \\\\\text{ Other data related to the pension plan for 2020 are: } \\\quad\quad\text{Current service cost } ....................................................... & 140,000 \\\quad\quad\text{ Contributions to the plan } ............................................. & 204,000 \\\quad\quad\text{ Benefits paid } ................................................................ & 220,000 \\\quad\quad\text{ Actual return on plan assets} ......................................... & 192,000 \\\quad\quad\text{ Interest (discount) rate } ................................................ & 9\% \\ \end{array}$ Instructions
a) Calculate the defined benefit obligation at December 31, 2020.
b) Calculate the fair value of plan assets at December 31, 2020.
c) Calculate pension expense for 2020.
d) Prepare the journal entries to record the pension expense and the contributions for 2020.