Hanna Company has 200 employees who are expected to receive benefits under the company's defined-benefit pension plan. On January 1, 2019, Hanna Company amended its pension plan which caused an increase of $500,000 in its projected benefit obligation. The total number of service-years of these employees is 2,000. The actuary for the company's pension plan calculated the following net gains and losses:

For the Year Ended

December 31 (Gain) Or Loss

2019 $660,000

2020 (918,600)

2021 (79,000)

Prior to 2019, there was no unrecognized net gain or loss. Selected Information about the pension plan of Hanna Company is as follows:

2019 2020 2021

Projected benefit obligation, 1/1 $2,100,000 $2,340,000 $2,940,000

Projected benefit obligation, 12/31 2,340,000 2,940,000 3,180,000

Fair Value of Plan Assets, 1/1 1,680,000 2,460,000 2,550,000

Fair Value of Plan Assets, 12/31 2,460,000 2,550,000 2,945,000

Settlement rate 10% 10% 10%

Expected rate of return 8% 8% 8%

Service cost 210,000 234,000 294,000

Contributions 400,000 420,000 460,000

Benefits paid to retirees 300,000 310,000 320,000

Total service years 200 150 100

1. Based on the above information about Hanna Company, fill in the schedule below that reflects the amount of net gain or loss to be amortized by the company as a component of pension expense for the years 2019, 2020, and 2021. The company amortizes net gains or losses using the straight-line method over the average service life of participating employees.

Corridor Test and Gain/Loss Amortization Schedule

Accumulated

PBO Plan Assets Corridor (Gain)/ Loss Amortization

2019

2020

2021

2. Calculate the pension expense for 2021.

3. Prepare the journal entries to record the pension expense and the companys funding of the pension plan for 2021. The actual return on plan assets was $255,000.