As of January 1, 2020, Microbyte Computer Company which reports under IFRS began a defined benefit pension plan that covers all 300 of its employees. Employment levels have remained constant and are expected to remain so in the future. Prior to 2020, rather than having a defined benefit plan the company had a defined contribution plan that had accumulated assets of $2,100,000 in market value. All employees were retroactively grandfathered as to the defined benefit entitlements they would receive under the new plan. The companys insurance company, which is administering the pension plan, determined the following values effective on January 1, 2020:

Plan assets at market value $2,100,000

Accrued benefit obligation $3,000,000

Initial asset (obligation) $(900,000)

The companys funding policy is to contribute annually on December 31 at a rate of 15% of covered employees payroll. The annual payroll of employees covered by the pension plan amounted to $2,500,000 in 2020. Assume that all other cash inflows as well as expense accruals occur on the last day of the year.

The insurance company provided the following information for 2020:

Plan assets at market, December 31 $2,424,000

Accrued benefit obligation, December 31 $2,964,000

Current service costs relating to 2020 $ 125,000

Payments to retirees $ 40,000

Discount rate on obligations and expected return is 10%.

Required:

Provide the journal entries related to microbytes pension plan