Question

Pension Plan Entries Yuri Co. operates a chain of gift shops. The company maintains a defined contribution pension plan for its employees. The plan requires quarterly installments to be paid to the funding agent, Whims Funds, by the fifteenth of the month following the end of each quarter. Assume that the pension cost is $157,100 for the quarter ended December 31.
Journalize the entry to record the accrued pension liability on December 31.

Answer 1

Answer and Explanation:

The journal entry is shown below:

On Dec 31

Pension expense $157,100

     To Unfunded pension liability $157,100

(Being the quarterly pension cost is recorded)

here the pension expense is debited as it increased the expense and credited the unfunded pension liability as it also increased the liabilities

So, the above journal entry should be recorded