Babcock Company received the following reports of its defined benefit pension plan for the current calendar year: PBO Plan assets Balance, January 1 $ 650,000 Balance, January 1 $ 500,000 Service cost 365,000 Actual return 54,000 Interest cost 66,000 Annual contribution 226,000 Benefits paid (96,000) Benefits paid (96,000) Balance, December 31 $ 985,000 Balance, December 31 $ 684,000 The long-term expected rate of return on plan assets is 8%. Assuming no other data are relevant, what is the pension expense for the year? Multiple Choice $431,000 $377,000 $365,000 $391,000