Karen Company began a defined benefit pension plan on January 1, 2014. No prior service credit was granted to employees. Service costs amounted to $34,000 in 2014 and $37,000 in 2015. All contributions to the fund were made at the end of the year. A 10% discount rate was used. The expected (and actual) rate of return of plan assets was 12%.
Required:
Prepare journal entries for December 31, 2014 and 2015, assuming:
a.Funding equaled expense.
b.$31,000 was funded each year.
c.$38,000 was funded each year.

Question

Karen Company began a defined benefit pension plan on January 1, 2014. No prior service credit was granted to employees. Service costs amounted to $34,000 in 2014 and $37,000 in 2015. All contributions to the fund were made at the end of the year. A 10% discount rate was used. The expected (and actual) rate of return of plan assets was 12%.
Required:
Prepare journal entries for December 31, 2014 and 2015, assuming: 
a.Funding equaled expense.
b.$31,000 was funded each year.
c.$38,000 was funded each year.

Quizplus · Accepted Answer

The Answer of Karen Company began a defined benefit pension plan on January 1, 2014. No prior service credit was granted to employees. Service costs amounted to $34,000 in 2014 and $37,000 in 2015. All contributions to the fund were made at the end of the year. A 10% discount rate was used. The expected (and actual) rate of return of plan assets was 12%.
Required:
Prepare journal entries for December 31, 2014 and 2015, assuming: 
a.Funding equaled expense.
b.$31,000 was funded each year.
c.$38,000 was funded each year.

Karen Company Began a Defined Benefit Pension Plan on January