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Amherst City provides a defined benefit pension plan for employees of the city electric utility, ...

Amherst City provides a defined benefit pension plan for employees of the city electric utility, an enterprise fund. Assume that the projected level of earnings on plan investments is $190,000, the service cost component is $250,000, and interest on the pension liability is $160,000 for the year. Actual returns on plan assets for the year were $175,000, and the City is amortizing a deferred outflow resulting from a change in plan assumptions from a prior year in the amount of $6,000 per year. Prepare journal entries to record annual pension expense for the enterprise fund.

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Answer #1
Service cost 250,000
Interest 160,000
Cash 410,000
Plan assets - pension 410,000
Service cost 250,000
Interest 160,000
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