Oil Products Company purchases an oil tanker depot on January $1,2025,$ at a cost of $$600,000.$ Oil Products expects to operate the depot for $10$ years, at which time it is legally required to dismantle the depot and remove the underground storage tanks. It is estimated that it will cost $$75,000$ to dismantle the depot and remove the tanks at the end of the depot's useful life.

$($b$)$ Prepare any journal entries required for the depot and the asset retirement obligation at December $31,2025.$ Oil Products uses straight$-$line depreciation; the estimated salvage value for the depot is zero.Account Titles and Explanation

Debit

Credit

Accumulated Depreciation $-$ Plant Assets

$($To record depreciation for the depot$)$

Accumulated Depreciation $-$ Plant Assets

$($To record depreciation on asset retirement obligation$)$

$($To record interest on asset retirement obligation$)$