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Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281

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Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281
Textbook Problem
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Oak Company’s pension expense for the current year is $300,000, and the company funds $327,000. Prepare the journal entry Oak will nuke on December 31.

To determine

Prepare journal entries of Company O to record the pension expense as of December 31.

Explanation

Pension plan: Pension plan is the plan devised by corporations to pay the employees an income after their retirement, in the form of pension.

Prepare journal entries of Company O to record the pension expense as of December 31:

In this case, Company O has overfunded the pension contribution by $27,000($327,000$300,000) , hence debit the accrued/prepaid pension cost account by $27,000.

DateAccounts Title and ExplanationPost Ref

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