Amortization of Prior Service Cost

On January 1, 2013, 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 $600,000 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, 2013:

Employee Expected Years of Future Service A 1 B 3 C 4 D 5 E 5 F 6

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 2013 and 2014:

2013	2014
Service cost	$234,000	$253,000
Interest cost on projected benefit obligation	54,000	79,920
Expected return on plan assets		41,100

Baznik contributed $411,000 and $415,000 to the pension fund at the end of 2013 and 2014, respectively.

Required:

2. Prepare all the journal entries related to Baznik's pension plan for 2013 and 2014. For a compound transaction, if an amount box does not require an entry, leave it blank.

2013 1/1: Other Comprehensive Income: Prior Service Cost

Prior bene: Accrued/Prepaid Pension Cost

12/31 Payment: Pension Expense

12/31 Payment: Cash

12/31 Payment: Accrued/Prepaid Pension

Amortize: Accrued/Prepaid Pension Cost

Amortize: Other Comprehensive Income: Prior Service Cost

12/31/14 Payment: Pension Expense

12/31/14 Payment: Cash

12/31/14 Payment: Accrued/Prepaid Pension Cost

12/31 Amortize: Accrued/Prepaid Pension Cost

12/31 Amortize: Other Comprehensive Income: Prior Service Cost