Pona, Inc. has a defined benefit pension plan for its employees. The plan assets and projected benefit obligation at the beginning of the year were $608,000. The accumulated benefit obligation at the beginning of the year was $456,000. The expected return on plan assets was 8% while the actual return was 9%. The service cost for the year was $130,841. The actuarially assumed discount rate was 7% and amortization of prior service costs was $17,750.

The interest cost for the year is:

a. $42,560.

b. $31,920.

c. $36,480.

d. $41,040.

The total pension expense for the year is:

a. $124,761.

b. $131,451.

c. $136,431.

d. $142,511.

For income tax purposes, pension plan sponsors deduct the amount of the:

a. pension expense

b. service cost

c. plan contribution

d. service cost plus net amortization and deferral