Crane Company sponsors a defined benefit pension plan for its employees. The following data relate to the operation of the plan for the year 2020 in which no benefits were paid.

1. The actuarial present value of future benefits earned by employees for services rendered in 2020 amounted to $56,000.

2. The company's funding policy requires a contribution to the pension trustee amounting to $145,023 for 2020.

3. As of January 1, 2020, the company had a projected benefit obligation of $894,700, an accumulated benefit obligation of $803,700, and a debit balance of $397,300 in accumulated OCI (PSC). The fair value of pension plan assets amounted to $595,600 at the beginning of the year. The actual and expected return on plan assets was $53,900. The settlement rate was 9%. No gains or losses occurred in 2020 and no benefits were paid.

4. Amortization of prior service cost was $49,500 in 2020. Amortization of net gain or loss was not required in 2020.

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(a)

Correct answer. Your answer is correct.

Determine the amounts of the components of pension expense that should be recognized by the company in 2020. (Enter amounts that reduce pension expense with either a negative sign preceding the number e.g. -45 or parenthesis e.g. (45).)

Components of Pension Expense

select a component of Pension ExpenseEntry field with correct answer

Service Cost

$enter a dollar amountEntry field with correct answer

56,000

select a component of Pension ExpenseEntry field with correct answer

Interest on Projected Benefit Obligation

enter a dollar amountEntry field with correct answer

80,523

select a component of Pension ExpenseEntry field with correct answer

Expected Return on Plan Assets

enter a dollar amountEntry field with correct answer

(53,900)

select a component of Pension ExpenseEntry field with correct answer

Amortization of Prior Service Cost

enter a dollar amountEntry field with correct answer

49,500

select a component of Pension ExpenseEntry field with correct answer

Pension Expense

$enter a total amountEntry field with correct answer

132,123

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(b)

Correct answer. Your answer is correct.

Prepare the journal entry or entries to record pension expense and the employer's contribution to the pension trustee in 2020. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter 0 for the amounts.)

Account Titles and Explanation

Debit

Credit

Pension Expense

132,123

Pension Asset/Liability

62,400

Cash

145,023

Other Comprehensive Income (PSC)

49,500

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(c)

Indicate the pension-related amounts that would be reported on the income statement and the balance sheet for Crane Company for the year 2020.

Crane Company

Income Statement (Partial)

choose the accounting period

select an income statement item

select an income statement item

$enter a dollar amount

Crane Company

Comprehensive Income Statement

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select a comprehensive income item

$XXXX

select an opening section name

select a comprehensive income item

enter a dollar amount

select a closing name for this statement

$XXXX

Crane Company

Balance Sheet (Partial)

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select an opening name for section one

select a balance sheet item

$enter a dollar amount

select an opening name for section two

select a balance sheet item

$enter a dollar amount