Determine Abbott and Abbott’s pension expense

Abbott and Abbott has a noncontributory, defined benefit pension plan. At December 31, 2011, Abbott and Abbott received the following information:

 ($in millions)

Projected Benefit Obligation

Balance, January 1

$120

Service cost

20

Interest cost

12

Benefits paid

(9)

Balance, December 31

$143

Plant Assets

Balance, January 1

$80

Actual return on plan assets

9

Contribution 2011

20

Benefits paid

(9)

Balance, December 31

$100

The expected long-term rate of return on plan assets was 10%. There was no prior service cost and a negligible net loss AOCI on January 1, 2011.

Required:

1.Determine Abbott and Abbott’s pension expense for 2011.

2.Prepare the journal entries to record Abbott and Abbott’s pension expense, funding, and payment for 2011.