Gordon Company sponsors a defined benefit pension plan. The following information related to the pension plan is available for 2010 and 2011.
2010 2011
Plan assets (fair value), December 31 $699,000 $849,000
Projected benefit obligation, January 1 700,000 800,000
Pension asset/liability, January 1 140,000Cr ?
Prior service cost, January 1 250,000 240,000
Service cost 60,000 90,000
Actual and expected return on plan assets 24,000 30,000
Amortization of prior service cost 10,000 12,000
Contributions (funding) 115,000 120,000
Accumulated benefit obligation, December 31 500,000 550,000
Interest/settlement rate 9% 9%
a) Compute pension expense for 2010 and 2011.
B) Prepare the journal entries to record the pension expense and the company's funding of the pension plan for both years.