On January 1, 2016, Baznik Company adopted a defined benefit pension plan. At that time, Baznik awarded retroactive benefits to certain employees. These retroactive benefits resulted in a prior service cost of $1,176,000 on that date (which it did not fund). Baznik has six participating employees who are expected to receive the retroactive benefits. Following is a schedule that identifies the participating employees and their expected years of future service as of January 1, 2016: Employee Expected Years of Future Service A 1 B 3 C 4 D 5 5 E F 6 Baznik decided to amortize the prior service cost to pension expense using the years-of-future-service method. The following are the amounts of the components of Baznik's pension expense, in addition to the amortization of the prior service cost for 2016 and 2017: 2016 2017 Service cost $524,600 Interest cost on projected benefit obligation Expected return on plan assets 118,300 $586,983 155,337 79,400 Baznik contributed $911,500 and $906,100 to the pension fund at the end of 2016 and 2017, respectively. ASSETS REVENUE Prepare the entries to record the prior service cost on January 1, 2016, and the pension expense and amortization of prior service costs on December 31, 2016 and 2017. 411 Sales Revenue GENERAL JOURNAL 111 Cash 121 Accounts Receivable 141 Inventory 152 Prepaid Insurance EXPENSES 500 Cost of Goods Sold 181 Equipment 511 Insurance Expense DATE ACCOUNT TITLE 198 Accumulated Depreciation 512 Utilities Expense 1 521 Salaries Expense 2 LIABILITIES 211 Accounts Payable 231 Salaries Payable 250 Unearned Revenue 522 Pension Expense 3 532 Bad Debt Expense 540 Interest Expense 5 541 Depreciation Expense 251 Accrued/Prepaid Pension Cost 559 Miscellaneous Expenses 6 261 Income Taxes Payable 910 Income Tax Expense 7 EQUITY 311 Common Stock 331 Retained Earnings 916 Other Comprehensive Income: Prior Service Cost Prepare a set of schedules for the Baznik Company to determine the amortization fraction for each year. Additional Instruction 1 2 A 3 B 4 C 5 D 6 E 7 F 8 Total 9 Amortization fraction BAZNIK COMPANY Amortization Fractions PAGE 2016 PAGE 2017 POST. REF. DEBIT CREDIT Employee Expected Years of Future Service 2016-2021 Number of Service Years Rendered 2016 Number of Service Years Rendered 2017 Number of Service Years Rendered 2018 Number of Service Years Rendered 2019 Number of Service Years Rendered 2020 Number of Service Years Rendered 2021 Prepare a set of schedules for the Baznik Company to determine the amortization of the prior service cost. Additional Instruction 1 2 2016 3 2017 4 2018 5 2019 6 2020 7 2021 Year BAZNIK COMPANY Prior Service Cost Amortization 2016-2021 Total Prior Service Cost Amortization Fraction Amortization to Increase Pension Remaining Prior Service Cost Expense