Defined Benefit Pension Plan - Journal Entries
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TRM Corporation established a defined benefit pension plan in Year 5. In Year 8 the following information is available. Service cost = $45,000. Interest cost = $60,000. Actual return on plan assets = $35,000. Expected return on plan assets = $40,000. Net amortization of unrecognized losses = $15,000. If the company contributes $65,000 cash to the pension plan trustee, what one of the following journal entries properly records the payment?
A. DR Pension expense 45,000
DR Prepaid pension cost 20,000
CR Cash 65,000
B. DR Pension expense 60,000
DR Pension pension cost 5,000
CR Cash 65,000
C. DR Pension expense 65,000
CR Cash 65,000
D. DR Pension expense 80,000
CR Cash 65,000
CR Unfunded accrued pension cost 15,000
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Solution Summary
The solution explains the journal entry when a company contributes cash to a pension plan
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