Scallion Company received the following reports of its defined benefit pension plan for the current calendar year:

PBO		Plan assets
Balance, January 1	$420,000	Balance, January 1	$255,000
Service cost	193,000	Actual return	32,000
Interest cost	37,000	Annual contribution	115,000
Benefits paid	(85,000)	Benefits paid	(85,000)
Balance, December 31	$565,000	Balance, December 31	$317,000

The long-term expected rate of return on plan assets is 10%. Assuming no other data are relevant, what is the pension expense for the year?

a)$204,500.

b)$230,000.

c)$198,000.

d)$259,000.