Refer to the information for Lu Corp. in BE13-20 and BE13-21. Assume that the increase in the

Question:

Refer to the information for Lu Corp. in BE13-20 and BE13-21. Assume that the increase in the asset retirement obligation in 2017 related to the production of oil in 2017 was $61,942. Prepare any necessary entries to record the increase in the asset retirement obligation at December 31, 2017, assuming that Lu follows
(a) IFRS,
(b) ASPE.
In BE13-21
Refer to the information for Lu Corp. in BE13-20. Prepare any necessary adjusting entries that are associated with the asset retirement obligation and related expenses at December 31, 2017, assuming that Lu follows
(a) IFRS,
(b) ASPE. Ignore production-related costs for this question.
In BE13-20
Lu Corp. erected and placed into service an offshore oil platform on January 1, 2017 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 to use should be 8%. Prepare the entry to record the asset retirement obligation. Assume that none of the $1 million cost relates to production.
Discount Rate
Depending upon the context, the discount rate has two different definitions and usages. First, the discount rate refers to the interest rate charged to the commercial banks and other financial institutions for the loans they take from the Federal...