Question: Lu Corp erects and places into service an offshore oil
Lu Corp. erects and places into service an offshore oil platform on January 1, 2011, at a cost of $10 million. Lu is legally required to dismantle and remove the platform at the end of its nine-year useful life. Lu estimates that it will cost $1 million to dismantle and remove the platform at the end of its useful life and that the discount rate to be used should be 8%. Prepare the entry to record the asset retirement obligation.
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