Amortization of Prior Service Cost Instructions Chart of Accounts General Journal Next Level Instructions On January 1, 2016, Baznik Company adopted a defined benefit pension plan. At that time, Baznik awarded retroactive benefits to certain employees. These retroactive benefits resulted in a prior service cost of $1,140,000 on that date (which it did not fund). Baznik has six participating employees who are expected to receive the retroactive benefits. Following is a schedule that identifies the participating employees and their expected years of future service as of January 1, 2016: Employee Expected Years of Future Service 4 Baznik decided to amortize the prior service cost to pension expense using the years-of-future-service method. The following are the amounts of the Instructions Baznik decided to amortize the prior service cost to pension expense using the years-of-future-service method. The following are the amounts of the components of Baznik's pension expense, in addition to the amortization of the prior service cost for 2016 and 2017: 2016 Service cost Interest cost on projected benefit obligation Expected return on plan assets $542,500 $558,073 146,637 78,900 104,000 Baznik contributed $903,300 and $861,600 to the pension fund at the end of 2016 and 2017, respectively. Required 1. Next Level Prepare a set of schedules for Baznik to determine (a) the amortization fraction for each year and (b) the amortization of the prior service cost. 2. Next Level Prepare all the journal entries related to Baznik's pension plan for 2016 and 2017. Next Level Amortization Fractions 2016 - 2021 Expected Years of Number of Future Service Number of Service Years Rendered 2018 Number of Service Years Rendered 2017 Employee Service Years Rendered 2016 8 Total 9 Amortization fraction Number of Number of Number of Number of Service Years Sevie Years Service Years Service Years Rendered 2018 Rendered 2019 Rendered 2020 Rendered 2021 I Amortization of Prior Service Cost instructions Chart of Accounts | General Journal Next Level BAZNIK COMPANY Prior Service Cost Amortization 2016-2021 Amortization to ncrease Pension Expense Remaining Prior Service Cost Total Prior Amortization Year Fraction Service Cost 2 2016 2017 4 2018 5 2019 6 2020 7 2021