divy, thanks a lot for the explanation. I'm studying Pension from 3 different books, so I'm trying to reconciliate and do my own simplified way to deal with Pensions. The only difference I see in your JE is that you net the Plan assets expected return to the PBO. So the total pension expense doesn't change still the same $43, but the accounts used are different b/c you don't debit the pension asset account. So my question is when do you do a JE for the Plan Assets???

when you fund the account???

dr -Plan Assets

 cr - cash

Thanks a lot!

Per Becker study material, funding is done through the following JE :-

DR Pension benefit liability -current/non-current

CR   Cash

FV of the plan assets is increased by this funding/contribution.

Hope this helps !

One more thing :

Sponsor company (company making contributions to pension plan ) and a pension plan are two separate legal entities...

The CPA exam tests the sponsor company's accounts for the plan. It's not concerned with the pension plan's accounting.

That's what my study material says .....

Anyone, any different views???

You're a great help dyva! thanks

divya and sanju06, thanks so much for your explanations to my question. I think I'm almost there.

If I understand correctly Becker credits pension expense to Pension Benefit Liability/Benefit. Then you have -Pension Liability of it's underfunded. Pension Benefit if it's overfunded. In Becker do they ever do eny  JE to PBO??

Again, thanks a lot.