HRC Company sponsors a defined benefits pension plan to its employees. On January 1, 2021, the balances related to pension plan were as follows: Projected benefit obligation (PBO) Fair value of plan assets AOCI - Prior service cost AOCI -Net Loss The discount (or settlement) rate applicable to the plan is 10%. On January 1, 2022, the company amends the pension agreement resulting in a prior service cost of $260,000. The company uses straight- line amortization of prior service costs over the average remaining service life of the employees. Other data related to the pension plan are as follows: $2,600,000 $2,500,000 assumptions Expected return on plan assets Average service life of all employees -0- Service cost Contributions (funding) to the plan Benefits paid to retirees Actual return on plan assets Increase in PBO due to changes in actuarial 2021 $150,000 500,000 220,000 150,000 250,000 10% 2022 $170,000 880,000 280,000 200,000 10% 10 years Required: 1. Prepare Pension worksheet for the year 2021 and 2022 in Excel. Make sure to include all accompanying computations at the bottom of the worksheet (such as amortization of gain/losses). 2. Prepare the necessary journal entries for each year associated with the defined benefits pension plan for HRC. 3. What different amount(s)/ balances will be reported in the income statement and balance sheet at the end of year 2021 and 2022? 4. Is the pension plan underfunded or overfunded at the end of 2022 based on your computations? 5. Based on your answer for requirement 4, does HRC needs to increase or decrease the contributions to the pension plan in future assuming no immediate changes in actuarial assumptions? Why? 6. What journal entry would be recorded by HRC at the end of 2021 and 2022, if it was a defined contributions plan instead of defined benefits pension plan? Which of the two pension plans is a better choice for the HRC company and Why?