Recording Pension Expense, Gains/ Losses, Funding, Benefit Payments and Preparing Worksheet

Amex Company started a noncontributory defined benefit pension plan on January 1, 2019. The records of Amex Company indicate the following for the year 2020.

Account Balance	Jan. 1, 2020
Projected Benefit Obligation	$30,000 Cr.
Plan Assets	27,500 Dr.
Accumulated OCI Pension Gain/Loss	1,500 Cr.

Activity	2020
Service Cost	$10,000
Interest cost (interest rate, 10%)	3,000
Gain in PBI due to change in actuarial assumptions	2,000
Pension benefits paid	500
Actual earnings on plan assets	2,500
Plan funding (contributions)	15,000

1. Compute net pension expense for 2020 assuming that the January 1, 2020, Accumulated OCIPension Gain/Loss is amortized in 2020 over a 15-year average remaining service period.

Pension expense, 2020

$10,400

1. Prepare the 2020 pension expense, deferral of gain, funding, and benefits paid entries for Amex Company.

Note: List multiple debits (when applicable) in alphabetical order and list multiple credits (when applicable) in alphabetical order.

Date	Account Name	Debit	Credit
Dec. 31, 2020	Pension Expense	10,400
	Plan Assets	XXX
	XXX	XXX
	Projected Benefit Obligation		XXX
	To record pension expense

Date	Account Name	Debit	Credit
Dec. 31, 2020	XXX	XXX
	OCI Pension Gain/Loss		XXX
	To record deferral of actuarial gain or loss on PBO

Date		Account Name	Debit		Credit
Dec. 31, 2020		Plan Assets	XXX
		Cash			XXX
		To record plan funding

Date		Account Name	Debit		Credit
Dec. 31, 2020		Projected Benefit Obligation	XXX
		XXX			XXX
		To record benefits paid
Date	Account Name			Debit		Credit
Dec. 31, 2020	Projected Benefit Obligation			XXX
	XXX					XXX
	To record benefits paid

1. Compute the underfunded (overfunded) pension balance as of December 31, 2020.

Note: Use a negative sign for a net pension liability.

Net pension asset (liability)