The Bailey Company has had a defined benefit pension plan for several years. At the end of 2007 the company’s actuary provided the following information for 2007 regarding the pension plan: (1) Service cost, $115,000;

(2) Expected return on plan assets, $14,000;

(3) Amortization of unrecognized net loss, $2,000;

(4) Interest cost on projected benefit obligation, $16,000; and

(5) Amortization of unrecognized prior service cost, $4,000. The company decides to fund an amount at the end of 2007 equal to its pension expense.

Required

Compute the amount of Bailey Company’s pension expense for 2007 and prepare the related journal entry.