Question

Data pertaining to the postretirement health care benefit plan of Sterling Properties include the following for 2018: ($ in 0Required 1 Required 2 Prepare the appropriate journal entries to record the postretirement benefit expense, funding, and re iRequired 1 Required 2 Prepare the appropriate journal entries to record the postretirement benefit expense, funding, and retiRequired 1 Required 2 Prepare the appropriate journal entries to record the postretirement benefit expense, funding, and reti

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Answer #1

Required 1:

Calculation

Service Cost 136
Interest Cost (700*8%) 56
Return on Plan Assets (30*10%) -3
Amortization of Prior Service Cost 0
Amortization of Net Gain -2
Postretirement Benefit Expense 187

Required 2:

Journal Entries:

Account Titles Debit Credit
Postretirement Benefit Expense $187
Plan Assets (30*10%) $3
Net Gain-AOCI $2
Accumulated Postretirement benefit Obligation (136 + 56) $192
(To record postretirement benefit expense)
Plan Assets $200
Cash (Contributions to Fund) $200
(To record the funding)
Postretirement Benefit Obligation $88
Plan Assets (Retiree Benefits) $88
(To record the payment of benefits)
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