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Answer the following questions (using journal entries): 1. Record the pension expense. 2. Record the gain or loss on plan assets. 3. Record the prior
Answer the following questions (using journal entries):
1. Record the pension expense.
2. Record the gain or loss on plan assets.
3. Record the prior service cost.
4. Record the funding.
5. Record the payment of the retiree benefits.
Journal entry options:
NJE
Cash
Gain-OCI
Income tax expense
Income tax payable
Loss-OCI
PBO
Pension expense
Plan assets
Prior service cost- OCI
Lacy Construction has a noncontributory, defined benefit pension plan. At December 31, 2021, Lacy received the following information: ($ in millions) $1,000 84 Projected Benefit Obligation Balance, January 1 Service cost Prior service cost Interest cost(5.0%) Benefits paid Balance, December 31 36 $1,073 Plan Assets Balance, January 1 Actual return on plan assets Contributions 2021 Benefits paid Balance, December 31 ($ in millions) $ 470 51 84 (97) $ 508 The expected long-term rate of return on plan assets was 10%. There were no AOCI balances related to pensions on January 1, 2021. At the end of 2021, Lacy amended the pension formula creating a prior service cost of $36 million. Required: 1. Determine Lacy's pension expense for 2021. 2. Prepare the journal entry(s) to record Lacy's (a) pension expense, (b) gains or losses, (c) prior service cost, (d) funding, and (e) payment of retiree benefits for 2021. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Determine Lacy's pension expense for 2021. Pension expense $ 87 million Required 1 Required 2 >
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