Beale Management has a noncontributory, defined benefit pension plan. The company provided the following information regarding its pension accounts for the fiscal year ended on December 31, 2015.
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$ in millions
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PBO Balance, January 1
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$590
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Service cost
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70
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Prior service cost
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27
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Plan Assets Balance, January 1
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500
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Actual return on plan assets
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18
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- There were no OCI balances related to pensions on January 1, 2015. At the end of 2015, Beale amended the pension formula creating a prior service cost of $27 million.
- Beale prepares its financial statements according to IFRS. The interest rate on high quality corporate bonds is 4%.
1/ Determine the net pension cost for 2015.
2/ Prepare the journal entry to record Beale's pension expense, gains or losses, and prior service cost.