Gordon Company sponsors a defined benefit pension plan. The following information related to the pension plan is available for 2014 and 2015.
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2014
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2015
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Plan assets (fair value), December 31
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$1,423,863
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$1,729,413
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Projected benefit obligation, January 1
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1,425,900
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1,629,600
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Pension asset/liability, January 1
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285,180
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Cr.
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?
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Prior service cost, January 1
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509,250
|
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488,880
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Service cost
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122,220
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183,330
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Actual and expected return on plan assets
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48,888
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61,110
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Amortization of prior service cost
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20,370
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24,444
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Contributions (funding)
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234,255
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244,440
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Accumulated benefit obligation, December 31
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1,018,500
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1,120,350
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Interest/settlement rate
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8
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%
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8
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%
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a. Compute pension expense for 2014 and 2015.
b. Prepare the journal entries to record the pension expense and the company's funding of the pension plan for both years.