Course Content $/$ Chapter $11/$ HM$03$

HM$03$

Required

a$.$ On January $1,$ record the entry for $(1)$ the purchase and installation of the storage tank and $(2)$ the related asset retirement obligation.

b$.$ Record adjusting entries on December $31$ of the current year for $(1)$ depreciation and $(2)$ accretion.

c$.$ Assume that on December $31,$ fifteen years later, the tank is safely removed at a cost of $$230,000.$ Record the required journal entry.

Note: Round answers to the nearest whole dollar.

$\backslash$table$[[,$Account Name,Dr$.,$Cr$.],[$a$.1.$ Jan. $1,,0,0],[,0,0],[$To record purchase of storage tank,,$],[$a$.2.$ Jan. $1,,0,0],[,0,0],[$To record asset retirement obligation,,$],[$b$.1.$ Dec. $31,,0,0],[,0,0],[$To record depreciation,,$],[$b$.2.$ Dec. $31,,0,0],[,0,0],[$ To record accretion $\_,,],[$c$.$ Dec. $31,$ Year $15,,0,0],[,0,0],[,0,0],[$To record asset retirement,,$]]$