Question

Yuri Co. operates a chain of gift shops. The company maintains a defined contribution pension plan for its employees. The plan requires quarterly installments to be paid to the funding agent, Whims Funds, by the fifteenth of the month following the end of each quarter. Assume that the pension cost is $122,600 for the quarter ended December 31.

Required:
Journalize the entry to record the accrued pension liability payment to the funding agent on January 15.

Answer 1

Answer:

Date                   Account Title                      Debit           Credit

31 Dec.       Pension Expense                      $122,600

                   Unfunded pension liability                           $122,600

                   (To record the quarterly pension cost)

15 Jan.        Unfunded pension liability        $122,600

                   Cash                                                              $122,600

                   (To record the payment of accrued pension liability)