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Lina20 [59]
4 years ago
7

Castillo Company has a defined benefit pension plan. At the end of the reporting year, the following data were available: beginn

ing PBO, $81,000; service cost, $18,600; interest cost, $5,600; benefits paid for the year, $9,600; ending PBO, $95,600; the expected return on plan assets, $10,600; and cash deposited with pension trustee, $19,000. There were no other pension-related costs. The journal entry to record the annual pension costs will include a credit to the PBO for:
Business
1 answer:
andrey2020 [161]4 years ago
8 0

Answer:

Explanation:

Before passing the journal entry, we have to find out the pension expenses amount which is shown below:

Pension expenses = Service cost + interest cost - the expected return on plan assets

= $18,600 + $5,600 - $10,600

= $13,600

Now, the journal entry would be

Pension expense A/c Dr $13,600

Plan assets A/c Dr           $10,000

     To PBO                                         $23,600

(Being annual pension cost recorded)

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