Textbook Problem

Verna Company has had a defined benefit pension plan for several years. At the end of 2019, Verna accumulated the following information: (1) service cost for 2019, $127,000; (2) projected benefit obligation, 1/1/2019, $634,000; (3) discount rate, 9%; (4) plan assets. 1/1/2019, $589,000; and (5) expected long term rate of return on plan assets, 9%. There are no other components of Verna’s pension expense. Verna had an accrued/prepaid pension cost liability at the end of 2018. Verna contributed $128,000 to the pension plan at the end of 2019.

Required:

Compute the amount of Verna’s pension expense for 2019 and prepare the related journal entry.