Aykroyd Inc. has sponsored a noncontributory, defined benefit pension plan for its employees since 1989. Prior to 2015, cumulative net pension expense recognized equaled cumulative contributions to the plan. Other relevant information about the pension plan on January 1, 2015, is as follows.

1. The company has 200 employees. All these employees are expected to receive benefits under the plan.

2. The defined benefit obligation amounted to \($5\),000,000 and the fair value of pension plan assets was

\($3\),000,000. The market-related asset value was also \($3\),000,000.

On December 31, 2015, the defined benefit obligation and the vested benefit obligation were \($4\),850,000 and \($4\),025,000, respectively. The fair value of the pension plan assets amounted to \($4\),100,000 at the end of the year. A 10% discount rate was used in the actuarial present value computations in the pension plan. The present value of benefits attributed by the pension benefit formula to employee service in 2015 amounted to \($200\),000. The employer’s contribution to the plan assets amounted to \($775\),000 in 2015. This problem assumes no payment of pension benefits.
Instructions (Round all amounts to the nearest dollar.)

(a) Compute pension expense for the year 2015.

(b) Prepare the journal entries required to report the accounting for the company’s pension plan for 2015.

(c) Compute the amount of the 2015 increase/decrease in net gains or losses in 2015.