Pension Obligation PBO
Definition: PV of earned defined benefit plan benefits
ModerateVery Difficult
PV of earned defined benefit plan benefits
Common Journal Entries
| Account | Debit | Credit |
|---|---|---|
| 1. Record pension expense | ||
| Annual pension cost is $12,000. | ||
| Pension Expense | $12,000 | |
| Pension Liability | $12,000 | |
| Obligation to employees recognized. | ||
| 2. Make contribution to plan | ||
| Contribute $10,000 to pension fund. | ||
| Pension Liability | $10,000 | |
| Cash | $10,000 | |
| Liability reduced; underfunded by $2,000. | ||
DurationLong-Term
Related Reports
- Balance Sheet(Primary — LT liability)
- Form 10-K Annual Report(Primary — Pension note)
External Links
- Pension#Accounting — Wikipedia