BPP Company maintains underground storage tanks for its operations. A new storage tank was installed and made ready for use at a cost of $2,000,000 on January 1 of the current year. The tank's useful life is estimated at 15 years, at which time the company is legally required to remove the tank and restore the area at an estimated cost of $200,000. The appropriate discount rate for the company is 12%. 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. Account Name a. 1. Jan. 1 Equipment Cash To record purchase of storage tank Equipment Dr. 2,000,000 0 Cr. 2,000,000 a. 2. Jan. 1 Asset Retirement Obligation 0 0 x 0 133,333 x To record asset retirement obligation b. 1. Dec. 31 Depreciation Expense 133,333 Accumulated Depreciation 0 0 x 133,333 x To record depreciation b. 2. Dec. 31 Accretion Expense Asset Retirement Obligation 0 0 0x 0 x To record accretion c. Dec. 31, Year 15 Asset Retirement Obligation 0x Loss on Settlement of Asset Retirement Obligation Cash To record asset retirement 0 0 0 0 x 0x