Q. Karen Company began a defined benefit pension plan on January 1, 2014. No prior service credit was granted to employees. Service costs amounted to $34,000 in 2014 and %37,000 in 2015. All contributions to the fund were made at the end of the year. A 10% discount rate was used. The expected (and actual) rate of return of plan assets was 12%.

Required:

Prepare journal entries for December 31, 2014 and 2015, assuming:

Funding equaled expense

$31,000 was funded each year

$38,000 was funded each year