Question

At december 31, 2017, mongo, inc., reported in its balance sheet a net loss of $3 million related to its pension plan. the actuary for mongo at the end of 2018 increased her estimate of future salary levels. mongo's entry to record the effect of this change will include:

Answer 1

credit to PBO and debit to Loss-OCI

Step-by-step explanation:

As the pension transaction is registered as a projected benefit obligation as PBO is the measurement about pension liabilities of the company. So that the pension payment means that the PBO of the company witnesses a credit - a decrease.

Meanwhile, the increase in salary levels of the actuary make the debit in the Loss - OCI (other comprehensive income).