Using the information provided in BE13- 11, prepare the journal entries to record the first year’s depreciation and accretion accrual.
In BE13- 11
On January 1, Pollison Energy Group, Inc. acquired an oil processing plant at a total cost of $ 13,560,000, and paid cash. The estimated cost ( in today’s market) to dismantle the plant and restore the property at the end of the plant’s 10- year life is $ 2,100,000. Pollison’s cost of capital is 5%. Pollison depreciates the asset over its useful life by using the straight- line method with no salvage value. Prepare the journal entries required to record the acquisition of the plant asset.