Harrison Forklift\'s pension expense includes a service cost of $21 million. Har

Question

Harrison Forklift's pension expense includes a service cost of $21 million. Harrison began the year with a pension liability of $41 million (underfunded pension plan).

Interest cost, $9; expected return on assets, $15; amortization of net loss, $4.

Interest cost, $17; expected return on assets, $13; amortization of net gain, $4.

Interest cost, $17; expected return on assets, $13; amortization of net loss, $4; amortization of prior service cost, $5 million.

Required:
Prepare the appropriate general journal entries to record Harrison’s pension expense in each of the following independent situations regarding the other components of pension expense ($ in millions):

Explanation / Answer

Event Journal entry Debits Credits 1 pension expense(balance) 19 Plan asset 15 To PBO (21+9) 30 To Amortization of Net Loss 4 2 pension Expenses 21 Plan Asset 13 Amortization of net gain 4 To PBO(21+17) 38 3 Pension Expense 34 Plan Assets 13 To PBO(21+17) 38 To Amortization of net loss 4 To amortization of prior service cost 5

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