75 joan inc started a pension plan on january 1 2016 at that date prior service cost 4313587

75 joan inc started a pension plan on january 1 2016 at that date prior service cost 4313587

75.Joan, Inc. started a pension plan on January 1, 2016. At that date, prior service cost of $1,100,000 wasrecognized as a result of prior service creditgranted toexistingemployees. At December 31, 2016, the following information was available:

Service cost for 2016

$ 90,000

Fair value of plan assets

225,500

Projected benefit obligation

1,278,000

Employer contribution for 2016 (at 12/31)

225,500

Expected asset return rate

7%

Discount rate

8%

Average remaining service life

16 years

 

Required:

a.

Compute the pension expense for 2016.

b.

Prepare appropriate journal entries for 2016.

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