The Balance Sheet of the Illini as of 12/31/20X0:

Assets

Current Assets:

Cash $1,500,000

Accounts receivable, net 18,000

Inventory 50,000

Total current assets 1,568,000

Equipment 90,000

Goodwill 20,000

Total assets $1,678,000

Liabilities and shareholders' equity

Shareholders' equity:

Common stock, 20,000 shares outstanding, $1 par $20,000

Additional paid-in capital 280,000

Retained earnings 1,378,000

Total shareholders' equity 1,678,000

Total liabilities and shareholders' equity $1,678,000

Note that all additional paid-in capital (APIC) sub accounts (e.g., APIC-options and APIC-treasury stock), if any, are tracked in the Additional paid-in capital account on the Balance Sheet.

Illini Company adopts a new defined benefit pension plan for its employees starting on 1/1/20X1. At the end of 20X1, the actuary presents that the service cost is $10,000 and the year-end contribution made by Illini to the pension plan is $8,000. No benefit payments are made in 20X1 and 20X2. At the end of 20X2, the actuary provides the following information: service cost is $12,000; interest cost $1,000; actuarial loss is ($2,000), actual and expected returns on plan assets are $1,200 and $800, respectively, and Illinis year-end contribution to the plan is $6,000.

Date	Account Name	Debit	Credit
20X1
Pension expense (service cost)		[A]
	Cash		[B]
	Pension liability		[C]
20X2
Pension expense (service cost)		[D]
Pension expense (interest cost)		[E]
Net gain/loss - OCI-Actuarial		[F]
	Pension expense (expected return)		[G]
	Net gain/loss - OCI -plan assets		[H]
	Cash		[I]
	Pension Liability		[J]