Lincoln Industries adopted a defined benefit pension plan on March 19, 2017. The provisions of the plan were not made retroactive to prior years. A local bank, engaged as trustee for the plan assets, expects plan assets to earn a 10% rate of return. A consulting firm, engaged as actuary, recommends 4% as the appropriate discount rate. The service cost is $125,000 for 2017 and $260,000 for 2018. Actual rate of return on plan assets is 10% in both 2017 and 2018. Year-end funding is $140,000 for 2017 and $150,000 for 2018. There were no plan amendments, changes in actuarial estimates, and assumptions regarding the PBO in 2017. On January 1, 2018, the company amended the pension formula and made the change retroactive, creating a prior service cost of $55,000. Amortization of prior service cost for 2018 is $2,500. No retiree benefits were paid in 2017, but $15,000 was paid to retirees in 2018.

Required: 1. Calculate each of the following amounts as of both December 31, 2017 and December 31, 2018: a) Projected benefit obligation $_____________ b) Plan assets $_____________ c) Pension expense $_____________ d) Net pension asset or liability $_____________

2. Prepare ALL necessary 2018 journal entries to record pension activity.