Question

On January 1, 2014, Harrington Company has the following defined benefit pension plan balances.

Answer 1

Answer and Explanation:

a. The pension worksheet for the pension plan for the year 2014 and 2015 is presented on the excel spreadsheet

b. According to the scenario, The journal entry is

Journal Entry:-

Pension expenses A/c      Dr. $450,640

Other comprehensive income (gain/loss) A/c   Dr. $99,360

Other comprehensive income (prior service cost) A/c  Dr. $410,000

To pension assets & liabilities A/c      $675,000

To Cash A/c         $285,000

(Being the pension expense is recorded)  

For recording this we debited the pension expense, other income, gain or loss as it increased the expenses reduced the income and credited the cash and assets and liabilities because it reduced the cash and recognize the pension assets and liabilities