Defined benefit pension plan was initiated at the beginning of Year $1$

Retroactive benefits awarded but not funded on the adoption date $=$$$2,180,000$

Retro benefits to be amortized SL over average remaining service life of $16$ years

Compute Pension Expense for Year $1$ & Year $2.$

Service cost

Interest cost

Expected return

Amort of PSC

Pension Expense

Interest cost $=$ Beginning PBO $x$ discount rate

Year $1$:

Year $2$:

Expected return $=$ Beginning FV PA $x$ Expected LT ROR

Year $1$:

Year $2$:

Actual return $=$ Beginning FV PA $$ Actual ROR

Year $1$:

Year $2$:

Amort of PSC $($SL$)=$ Prior Service Cost $/$ Avg Service Life

Year $1$:

Year $2$:

Prepare pension plan JE's for Year $1$ & Year $2.$

$1/1/$Y$1$ DR

CR

$1/1/$Y$1$ DR

CR

CR

$12/31/$Y$1$ DR

CR

$1/1/$Y$2$ DR

DR

CR

CR

$12/31/$Y$2$ DR

CR

$12/31/$Y$2$ DR

CR

Track balances in PBO & Plan Asset T accounts over the $2$ years. At the end of each year, indicate if

a net pension asset or a net pension liability would be reported and specify the dollar amount.

Plan Assets

Plan Assets