Merciful Industries has a beginning PBO balance of $500,000 and a settlement rate of 7%. As a result of an amendment to the current union contract, there are prior service costs of $46,500. What is the journal entry to record amortization of the prior service costs for the second year, assuming that the company uses a 5 year amortization period.

a. Pension Expense 3255 / Projected Benefit Obligation 3255

b. Pension Expense 35,000 / Other Comprehensive Income 35,000

c. Other Comprehensive IncomePrior Service Costs 9300 / Projected Benefit Obligation 9300

d. Pension Expense 9300 / Other Comprehensive IncomePrior Service Costs 9300