The Kollar Company has a defined benefit pension plan. Pensioninformation concerning the fiscal years 2018 and 2019 are presentedbelow ($ in millions): Information Provided by Pension PlanActuary: Projected benefit obligation as of December 31, 2017 =$3,500. Prior service cost from plan amendment on January 2, 2018 =$700 (straight-line amortization for 10-year average remainingservice period). Service cost for 2018 = $660. Service cost for2019 = $710. Discount rate used by actuary on projected benefitobligation for 2018 and 2019 = 10%. Payments to retirees in 2018 =$520. Payments to retirees in 2019 = $590. No changes in actuarialassumptions or estimates. Net gain—AOCI on January 1, 2018 = $380.Net gains and losses are amortized for 10 years in 2018 and 2019.Information Provided by Pension Fund Trustee: Plan asset balance atfair value on January 1, 2018 = $2,500. 2018 contributions = $680.2019 contributions = $730. Expected long-term rate of return onplan assets = 12%. 2018 actual return on plan assets = $230. 2019actual return on plan assets = $280. Required: 1. Calculate pensionexpense for 2018 and 2019. 2. Prepare the journal entries for 2018and 2019 to record pension expense. 3. Prepare the journal entriesfor 2018 and 2019 to record any gains and losses and new priorservice cost. 4. Prepare the journal entries for 2018 and 2019 torecord the cash contribution to plan assets and benefit payments toretirees.
