Question

Lacy Construction has a noncontributory, defined benefit pension plan. At December 31, 2021, Lacy received the following information:

Projected Benefit Obligation	($ in millions)
Balance, January 1		$	800
Service cost			74
Prior service cost			26
Interest cost(5.0%)			40
Benefits paid			(72	)
Balance, December 31		$	868

Plan Assets	($ in millions)
Balance, January 1		$	370
Actual return on plan assets			42
Contributions 2021			74
Benefits paid			(72	)
Balance, December 31		$	414

The expected long-term rate of return on plan assets was 10%. There were no AOCI balances related to pensions on January 1, 2021. At the end of 2021, Lacy amended the pension formula creating a prior service cost of $26 million.

Required:
1. Determine Lacy's pension expense for 2021.
2. Prepare the journal entry(s) to record Lacy’s (a) pension expense, (b) gains or losses, (c) prior service cost, (d) funding, and (e) payment of retiree benefits for 2021.

**I can't seem to correctly figure out the journal entry for gains or losses (Question 2(b). Thank you

Answer 1

credition Answer: u calculation of Lacyó pension ea penses for 202) particulars Amountin service cost $74 Interest cost $ 40 Expected return on the plauassete 1437) ($370x10 %) Amortization of prior service cost $ 0 Amostization of Net gain 288) Loss-AOCI $0 pension expense $ 77 2) Journal entries: Date particulars The Debit i a) pension expense ale $77 plan assets Ake 64370x102) or $ 37 To projected Benefit obligatia Being to record the pension expence] & plan assets ale or cu To Gain-OCT $42-$37] (Actual return- tæpected returny. Being to record gain- oct) c) prior Service cost-OCT Ale - or $26 1. To projected Benefit obligation Being to record prior Service cost-ocs] d) plan asset Ale or $74 . To cash (Being to the record funding] ey projected Benefit obligation He Dr $ 79 To plan assets Being to record the settree benefit DY $ 5 $26 $72