Adjusting Journal Entry Dated Account-Title & Explanation Post-Ref.a Debita Credita Dec. .31, 20170 Pension expense-(E+)0 $171,600% Accrued/Prepaid-Pension cost (A+ )0 $3.4000 Cash-(A-)0 0 $175,0000 Recorded pension expense for-2017.0 Because-Baron Company-funds-$175,000 in-2017-when the pension expense is $171,000, and- recognizes an asset, Accrued Prepaid Pension Cost, of-$3,400. .Therefore, Barons-Company's accountant would have to record (post) and report a pension asset-when the projected-benefit- obligation (PBO), (the actuarial present value, or present value of its pension benefits), is smaller- than the fair value of pension plan assets. I At the end of-2017, the $171,000 projected-benefit obligation is-$3,400-less than the-$175,000,- the fair value of the pension plan assets, so the pension plan is overfunded by-$3,400.-The- $3,400-debit-balance in-Accrued/Prepaid-Pension-Cost reflects the overfunded status of the- pension plan and no adjustment is necessary-because there are no prior service costs or gains or losses. I v Baron-Company reports this overfunded amount as its pension plan asset, Prepaid-Pension- Cost, on its December-31, 2017, balance sheet. I If the pension plan were underfunded because the projected-benefit obligation (or projected. obligation) exceeded the fair value of pension plan assets, Baron Company would recognize a noncurrent-liability, Accrued-Pension-Cost. --Thus, Barons-Company's-accountant would have to record (post) and report a pension -liability when the projected-benefit obligation (PBO), (the- actuarial present value, or present value of its pension benefits), is higher than the fair value of- pension plan assets. TTo record the pension accrual. The amount is given in the instructions.I Postretirement Benefits Peyton Approved has revised its postretirement plan. It will now provide health insurance to retired employees. Management has requested that you report the short- and long-term financial implications of this. . The company is currently employing 60, and actuaries estimate that the company has a pension liability of $107,041.70. * The estimated cost of retired employees' health insurance is $43,718.91. . Prepare adjusting entries for the pension liability and the health insurance liability Adjusting Journal Entry Date Account Title & Explanation Post-Ref. Debito Credita Dec.-31, Pension expense (E+)0 $107.041.70% 20170 Accrued pension cost (+). 0 $107.041.70OR Recorded pension expense for-20170 | 0