The plan was adopted on January 1, 20X3, and all employees were granted benefits for prior service. This action immediately created a projected benefit obligation of $205,352. Aquamaint immediately contributed $155,000 to the plan. In 20X3 employees earned benefits resulting in a service cost of $113,278. On December 31, 20X3, Aquamaint provided additional funding in the amount of $130,000. Interest on the PBO that was outstanding all year long was accrued at 4 percent. The return on plan assets invested in January was expected to approximate 8 percent. The plan is administered by the trust department of Midwest Regional Bank. The plan assets are invested in exchange-listed equity securities (40%), corporate bonds (15%), and U.S. government bonds (45%). I don't know how to compute pension expense, so I have expensed the cash payments. There was one other interesting thing about this pension plan. They set it up with an expected rate of compensation increase of 5%, yet I did not get a raise at all this year.