COMPIT 06619 7. FuelCo bought a gas station with underground fuel tanks on January 1, 2016. The cost of the fuel tanks The company estimates that the fuel tanks will have a useful life of 10 years and that the ASSET RETIREMENT OBLIGATIONS' costs to remove the tanks (required by law) will be $75,000 at the end of 10 years. The company assumes a 7% discount was $500,000. scount rate and depreciates the fuel tanks using the straight-line method with no residual value o prepares annual financial statements using U.S. GAAP with a December 31 fiscal year end n0. a. What journal entry should FuclCo make on January 1, 2016, to recognize the purchase of t tanks and the related asset retirement obligation? (6 points) 1,7% 0, 04 g 34 15, 060 ank Cr. eaSh Tan K 75,000 x 0.04834-36zg ?Ho. at are the effects (direction and amount) of the legal obligation to remove the fuel tanks on FuelCo's 2016 net income? (4 points) ReducFual Co's in nut income c. Assume that FuelCo removes the fuel tanks on January 1, 2026, for a cost of $80.000. What journal entry should FuelCo make on that date for the removal of the fuel tanks? (6 points) la "Modified from Example 13.11 of Intermediate Accounting by Gordon, Raedy, and Sannella