You work as a pension accounting specialist at a national accounting firm. One of your publicly listed clients (LL Inc.) just lost their finance manager. The staff could not get access to his working papers from the prior year and they are quite inexperienced. They have hired you to help in accounting and reporting for their pension for the year ended December 31, 2019 and 2020. You meet with their senior accountant who gives you bank statements for the 2019 and 2020 year. You can see that that the corporation has paid $120,000 and $125,000 throughout the year to retirees for 2019 and 2020 respectively. There were two large wire payments made from the bank account to the retirement plan of $250,000 on April 1^st 2019 and $275,000 on September 30, 2020. You review the financial statements from December 31, 2018 and you note that the closing balance of the defined benefit obligation was 1,000,000 and the closing balance of the pension plan asset was 880,000.

You have a meeting with the corporate secretary who gives you some of the minutes of the compensation and nomination committee. You note the following items:

• Due to unfavorable business conditions, the board had decided to reduce the retirement income benefit that retirees can expect. The decrease of benefit of 5% resulted in decrease in the defined benefit obligation by $200,000. This was retrospective to June 30, 2019.
• Due to COVID-19s impact on the business, a further reduction of 1% of the benefits was made in 2020. This was retrospective to March 31, 2020 and resulted in a $25,000 reduction in the defined benefit obligation.
• In the actuarys presentation to the committee, they stated that the interest rate of obligations and the expected return on assets was 13% for both years.
• Throughout the year, employees earned pension benefits of $300,000 in 2019 and $315,000 in 2020.
• Per the actuarial valuation, defined benefit obligations were $1,100,000 in 2019 and $910,000 in 2020 and the fair market value of the plan asset were $1,000,000 in 2019 and $830,000 in 2020.

Required:

1. Prepare the schedules (worksheet accounts) to reconcile the opening and closing balances of pension assets and obligations for 2019 and 2020 (including the funding status).

2. For the years 2019 and 2020, show the individual components, which make up the pension expense.

3. Record the journal entries for the corporations pension in 2019 and 2020.

4. Determine the balance of the net defined benefit pension liability as at December 31, 2019 and 2020