On January $1,2023,$ Sarasota Corporation erected a drilling platform at a cost of $$5,569,200.$ Sarasota is legally required to dismantle

and remove the platform at the end of its $6$ year useful life, at an estimated cost of $$969,000.$ Sarasota estimates that $70\%$ of the cost

of dismantling and removing the platform is caused by acquiring the asset itself, and that the remaining $30\%$ of the cost is caused by

using the platform in production. The present value of the increase in asset retirement obligation related to the production of oil in

$2023$ and $2024$ was $$32,975$ and $$35,612,$ respectively. The estimated residual value of the drilling platform is zero, and Sarasota uses

straight$-$line depreciation. Sarasota prepares financial statements in accordance with IFRS.

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$($a$)$

Your answer is partially correct.

Prepare the journal entries to record the acquisition of the drilling platform and the asset retirement obligation for the platform

on January $1,2023.$ An appropriate interest or discount rate is $8\%.$ Use $(1)$ factor Table A$\mathrm{.}2,(2)$ a financial calculator, or $(3)$ Excel

function PV in your calculations. $($Round factor values to $5$ decimal places, e$.$g$.1\mathrm{.}25124$ and final answers to $0$ decimal places, e$.$g$.5,275.$

Credit account titles are automatically indented when the amount is entered. Do not indent manually. List all debit entries before credit

entries. If no entry is required, select $"$No Entry" for the account titles and enter O for the amounts.$)$

$($To record the cost of drilling platform$)$

Drilling Platform

Asset Retirement Obligation

$($To recognize the retirement liability$)$

$($b$)$

Prepare any journal entries required for the platform and the asset retirement obligation at December $31,2023.($Round answers

to $0$ decimal places, e$.$g$.5,275.$ Credit account titles are automatically indented when the amount is entered. Do not indent manually. List

all debit entries before credit entries. If no entry is required, select $"$No Entry" for the account titles and enter O for the amounts.$)$

Account Titles and Explanation

Debit

Credit

$($To record depreciation expense$)$

$($To record interest expense$)$

$($To record production of oil inventory$)$