Question 1:

The following data are for Guava Company's retiree health care plan for the current calendar year.

Number of employees covered ------------------ 5

Years employed as of January 1 ------------------ 4 (each)

Attribution period ------------------- 20 years

EPBO, January 1 ------------------- 57,000

EPBO, December 31 ----------------- 59,000

Interest rate ------------------ 4%

Funding and plan assets ------------------ none

a.) Determine the pension expense for the year. (Amounts to be deducted should be indicated with a minus sign.)Show all calculations. Use the book and power points/videos as examples of how to show calculations and label all amounts.

b.) Prepare the journal entry to record the pension expense.