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 $1,230,000 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

E 5

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 $406,100 $501,213

Interest cost on projected benefit obligation 114,900 151,937

Expected return on plan assets 77,600

Baznik contributed $799,300 and $829,900 to the pension fund at the end of 2016 and 2017, respectively.

Required:

1. Next LevelPrepare a set of schedules for Baznik to determine (a) the amortization fraction for each year and (b) the amortization of the prior service cost.

2. Next LevelPrepare all the journal entries related to Baznik's pension plan for 2016 and 2017.

CHART OF ACCOUNTS

Baznik Company

General Ledger

ASSETS

111 Cash

121 Accounts Receivable

141 Inventory

152 Prepaid Insurance

181 Equipment

198 Accumulated Depreciation

LIABILITIES

211 Accounts Payable

231 Salaries Payable

250 Unearned Revenue

251 Accrued/Prepaid Pension Cost

261 Income Taxes Payable

EQUITY

311 Common Stock

331 Retained Earnings

916 Other Comprehensive Income: Prior Service Cost

REVENUE

411 Sales Revenue

EXPENSES

500 Cost of Goods Sold

511 Insurance Expense

512 Utilities Expense

521 Salaries Expense

522 Pension Expense

532 Bad Debt Expense

540 Interest Expense

541 Depreciation Expense

559 Miscellaneous Expenses

910 Income Tax Expense