Question

Colombo Enterprises has a defined benefit pension plan. At the end of the reporting year, the following data were available: beginning PBO, $75,000; service cost, $14,000; interest cost, $6,000; benefits paid for the year, $9,000; ending PBO, $89,000; and the expected return on plan assets, $10,000. There were no other pension-related costs. The journal entry to record the annual pension costs will include a debit to pension expense for:

Answer 1

Answer:

A debit to pension expense for  $10,000

Explanation:

Journal Entry for pension expenses:

Explanation                     Debit             Credit

Pension Expense            $10,000

       Cash                                             $10,000

(To record pension expenses)

Pension expenses for the year ended is comprised of the following components of pension cost.

Service Cost              14,000

Interest cost               6,000

Expected return on   (10,000)

plan assets               _______

Pension expenses    $10,000