Colombo Enterprises Has a Defined Benefit Pension Plan

Colombo Enterprises has a defined benefit pension plan. At the end of the reporting year, the following data were available: beginning PBO, $75,000; service cost, $14,000; interest cost, $6,000; benefits paid for the year, $9,000; ending PBO, $89,000; and the expected return on plan assets, $10,000. There were no other pension-related costs. The journal entry to record the annual pension costs will include a debit to pension expense for:

A) $20,000.
B) $15,000.
C) $12,000.
D) $10,000.

Correct Answer:

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