On January 1, 2014, Harrington Company has the following defined benefit pension plan balances.
Projected benefit obligation $4,500,000
Fair value of plan assets 4,200,000
The interest (settlement) rate applicable to the plan is10%On January 1, 2015, the company amends its pension agreement so that service costs of$500,000 are created. Other data related to the pension plan are as follows:
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2012 2013
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Service costs $150,000 $180,000
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Prior service costs amortization 0 90,000
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Contributions (funding) to the plan 240,000 285,000
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Benefits paid 200,000 280,000
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Actual return on plan assets 252,000 260,000
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Expected rate of return on assets 6% 8%
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Requirements:
(A) Prepare a pension worksheet for the pension plan for 2014 and 2015.
(B) For 2015, prepare the journal entry to record pension-related amounts.