The Peanut Company has a defined benefit pension plan for its employees. The following information pertains to the pension plan:

The December 31, 2014 adjusting journal entries include a

Question

The Peanut Company has a defined benefit pension plan for its employees. The following information pertains to the pension plan:

The December 31, 2014 adjusting journal entries include a

Quizplus · Accepted Answer

The adjusting journal entry for a defined benefit pension plan at the end of the period is usually a debit to Accrued/Prepaid Pension Cost to increase the liability for the company's obligation to pay future pension benefits to its employees. The amount of the adjustment is based on actuarial calculations and can change depending on various factors such as changes in interest rates or life expectancy. Therefore, choice A is the best answer as it represents a common adjusting entry for a defined benefit pension plan.

The Peanut Company Has a Defined Benefit Pension Plan for Its