The information for pension plan of XYZ Company for the year 2010 is given below.

Actual and expected return on plan assets              $12,000
Benefits paid to retirees                                           40,000
Contributions (funding)                                            95,000
Interest / discount rate                                                10%
Prior service cost amortization                                   8,000
Projected benefit obligation, Januuary 1, 2010        500,000
Service cost                                                             60,000

Instructions

1. find out pension expense for the year 2010.

2. Create the journal entry to record pension expense and employer’s contribution to pension plan in 2010.