A non-Fordham accounting graduate gathered some pension data for Commerce Mill Company. The data indicated the following for the current year:

Service cost was $100,000;

interest cost was $60,000;

market-related value of plan assets on January 1st were $800,000;

the expected return on plan assets was 10%;

the actual return on plan assets was 12%; and

the amortization of prior service costs was $6,000.

You are a Fordham graduate and you know how to read GAAP. You go to the Accounting Standards Codification (ASC) and find topic ASC 715 (Compensation Retirement Benefits), where you learn that, in addition to the items above, amortization of net losses may need to be included in the calculation of pension expense. Specifically, the standard says:

"As a minimum, amortization of a net gain or loss...shall be included as a component of net pension cost for a year if, as of the beginning of the year, the net gain or loss exceeds 10 percent of the the greater of the projected benefit obligation or the market-related value of plan assets. If amortization is required, the minimum amortization shall be that excess divided by the average remaining service period of active employees expected to receive benefits under the plan. (ASC 715-30-35-24).

You then go to the actuarys report and find that, as of the beginning of the year, Commerce Mill had a net loss of $100,000 (previous losses exceeded previous gains). You also learn that the average remaining service period of active employees expected to receive benefits under the plan is 10 years. Finally, you confirm that the market-related value of plan assets at the beginning of the year were $800,000 (the non-Fordham graduate got this right). You also learn the projected benefit obligation, as of the beginning of the year, was $700,000.

Required:

[1] Determine pension expense for the year.

[2] Prepare the journal entry necessary to record the current years pension expense.