Question: 1. Prepare the journal entries to record the depot (considered a plant asset) and the asset

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Question:

1. Prepare the journal entries to record the depot (considered a plant asset) and the asset retirement obligation for the depot on January 1, 2014. Based on an effective-interest rate of 5%, the present value of the asset retirement obligation on January 1, 2014, is $38,738.

(If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Date	Account Titles and Explanation	Debit	Credit
January 1, 2014

	(To record the depot)
January 1, 2014

	(To record the asset retirement obligation)

2. Prepare any journal entries required for the depot and the asset retirement obligation at December 31, 2014. Oil Products uses straight-line depreciation; the estimated salvage value for the depot is zero. (Round answers to 0 decimal places, e.g. 5,275. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Date	Account Titles and Explanation	Debit	Credit
December 31, 2014

	(To record depreciation for the depot)
December 31, 2014

	(To record depreciation on asset retirement obligation)
December 31, 2014

	(To record interest on asset retirement obligation)

3. On December 31, 2023, Oil Products pays a demolition firm to dismantle the depot and remove the tanks at a price of $83,400.

Prepare the journal entry for the settlement of the asset retirement obligation. (Round answers to 0 decimal places, e.g. 5,275. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)