Due to the type of business that your company is involved in, they often need to record an asset retirement obligation associated with the acquisition of long-lived assets. Create a model that will determine the amount the entity should record as an asset and a liability on the balance sheet at initial measurement. (Initial measurement is the present value of the future obligation. ) For your original data, use a future obligation of $1,500,000 with an annual interest rate of 6% and the obligation is due in 10 years. Your output area should include the initial measurement of the ARO. A schedule should also be created and should include the interest expense (accretion expense), depreciation expense on the additional amount added to the asset for the asset retirement obligation, total expense (impact on the Income Statement) and the ending balance in the asset retirement obligation. The model should be for a maximum of twenty years. You may also assume straight line depreciation with no salvage value.

nd Amortization Schedule Input Bond Data Maturity Value Bond Issue Date Stated Interest Rate Market Interest Rate Years Outstanding Times Interest Paid During the Year 100,000.00 1/1/2017 5.00% 4.50% 10 Output Bond Report: Cash Proceeds From Bond issue $103,956.36 Bond Amortization Schedule Amortization DR (CR) nd Carrving Value Interest Payment Cash Paymet Interest Expense CR DR $103,956.36 $103,634.40 $103,297.94 $102,946.35 $102,578.94 $102,194.99 $101,793.76 $101,374.48 $100,936.33 $100,478.47 $100,000.00 Initial S 5,000.00 S $5,000.00 $ $ 5,000.00 S $ 5,000.00 S S 5,000.00 S $5,000.00 $ $ 5,000.00 S $ 5,000.00 S $5,000.00 $ $ 5,000.00 $ 4,678.04$ 4,663.55$ 4,648.41$ 4,632.59 $ 4,616.05$ 4,598.77$ 4,580.72$ 4,561.85$ 4,542.14 S 4,521.53$ 321.96 336.45 351.59 367.41 383.95 401.23 419.28 438.15 457.86 478.47 10 nd Amortization Schedule Input Bond Data Maturity Value Bond Issue Date Stated Interest Rate Market Interest Rate Years Outstanding Times Interest Paid During the Year 100,000.00 1/1/2017 5.00% 4.50% 10 Output Bond Report: Cash Proceeds From Bond issue $103,956.36 Bond Amortization Schedule Amortization DR (CR) nd Carrving Value Interest Payment Cash Paymet Interest Expense CR DR $103,956.36 $103,634.40 $103,297.94 $102,946.35 $102,578.94 $102,194.99 $101,793.76 $101,374.48 $100,936.33 $100,478.47 $100,000.00 Initial S 5,000.00 S $5,000.00 $ $ 5,000.00 S $ 5,000.00 S S 5,000.00 S $5,000.00 $ $ 5,000.00 S $ 5,000.00 S $5,000.00 $ $ 5,000.00 $ 4,678.04$ 4,663.55$ 4,648.41$ 4,632.59 $ 4,616.05$ 4,598.77$ 4,580.72$ 4,561.85$ 4,542.14 S 4,521.53$ 321.96 336.45 351.59 367.41 383.95 401.23 419.28 438.15 457.86 478.47 10