Refer to the data of TR19-2. Assume now that the contribution to the plan assets was made 1 September 20X8 and pension payments to pensioners were paid evenly throughout the year.

Data From TR19-2

The following data are to be used for TR19-2 to TR19-6. Good day Ltd., a public company, has a defined benefit pension plan and a 31 December year-end. The following information relates to the plan:

Required:
Using this new information, calculate and record the second element of pension accounting for the defined benefit plan. That is, calculate net interest cost, and prepare the entry to record interest cost. Calculate the two components of net interest: interest on the defined benefit obligation and expected earnings on fund assets.

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Balances: Defined benefit obligation, end of 20X7 Pension plan assets, fair value, end of 20X7 SFP net defined benefit liability, end of 20X7 $5,215,000 4,810,000 405,000 cr.