Pension Plan Entries

Wren Co. operates a chain of gift shops. The company maintains a defined contribution pension plan for its employees. The plan requires quarterly installments to be paid to the funding agent, Whims Funds, by the fifteenth of the month following the end of each quarter. Assume that the pension cost is $233,000 for the quarter ended March 31.

a. Journalize the entry to record the accrued pension liability on March 31.

Mar. 31

Journalize the entry to record the accrued pension liability payment to the funding agent on April 15.

Apr. 15

b. The pension plan where a company pays the employee a fixed annual amount based on a formula is a defined contrribution plan or defined benefit plan?