Exercise 13-14 Buffalo Company purchases an oil tanker depot on January 1, 2017, at a cost of $552,300. Buffalo expects to operate the depot for 10 years, at which time it is legally required to dismantle the depot and remove the underground storage tanks. It is estimated that it will cost $81,010 to dismantle the depot and remove the tanks at the end of the depot's useful life Prepare the journal entries to record the depot (considered a plant asset) and the asset retirement obligation for the depot on January 1, 2017. Based on an effective-interest rate of 6%, the present value of the asset retirement obligation on January 1, 2017, is $45,235. (If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation Date Debit Credit January 1, 2017 Plant Assets 552300 Cash 552300 (To record the depot) January 1, 2017 Plant Assets 45235 Asset Retirement Obligation 45235 (To record the asset retirement obligation) Prepare any journal entries required for the depot and the asset retirement obligation at December 31, 2017. Buffalo 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, 2017 (To record depreciation for the depot) December 31, 2017 (To record depreciation on asset retirement obligation) December 31, 2017 (To record interest on asset retirement obligation) On December 31, 2026, Buffalo pays a demolition firm to dismantle the depot and remove the tanks at a price of $81,670. 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.) Date Account Titles and Explanation Debit Credit December 31, 2026