The Donna Company adopted a defined benefit pension plan on January 1, 2019, and prior service credit was granted to employees. As of January 1, 2019, the prior service cost is $68,250. The unrecognized prior service cost is amortized by the straight-line method over the remaining 15-year service life of the company’s active employees. Funding for the pension plan was

Sep 8, 2023

  1. The Donna Company adopted a defined benefit pension plan on January 1, 2019, and prior service credit was granted to employees. As of January 1, 2019, the prior service cost is $68,250. The unrecognized prior service cost is amortized by the straight-line method over the remaining 15-year service life of the company’s active employees. Funding for the pension plan was $170,745 and $186,933 at December 31, 2019 and 2020, respectively.
  2.                                                                           2019                       2020
  3. Annual service cost                                 $161,877                 $178,065
  4. Discount (interest) rate                                    8%                          8%
  5. Expected (and actual) return on plan assets 10%                      10%

  6. Required:
    Prepare the journal entries to record net periodic pension expense and the funding as of December 31, 2019 and 2020. Show computations and round answers to the nearest dollar.

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