On January 1, 2020, Ayayai Corporation erected a drilling platform at a cost of $4,641,000. Ayayai is legally required to dismantle and remove the platform at the end of its 6 year useful life, at an estimated cost of $807,500. Ayayai 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 2020 and 2021 was $27,479 and $29,677, respectively. The estimated residual value of the drilling platform is zero, and Ayayai uses straight-line depreciation. Ayayai prepares financial statements in accordance with IFRS. Click here to view the factor table PRESENT VALUE OF 1. Click here to view the factor table PRESENT VALUE OF AN ANNUITY OF 1. Prepare the journal entries to record the acquisition of the drilling platform, and the asset retirement obligation for the platform, on January 1, 2020. An appropriate interest or discount rate is 8%. Use (1) factor Table A.2, (2) a financial calculator, or (3) Excel function PV in your calculations. (Hint: For a review of present value concepts, see Chapter 3 of Volume 1.) (Round factor values to 5 decimal places, e.g. 1.25124 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. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Date Account Titles and Explanation Debit Credit Jan. 1, 2020 select an account title to record the cost of drilling platform on January 1 enter a debit amount enter a credit amount select an account title to record the cost of drilling platform on January 1 enter a debit amount enter a credit amount (To record the cost of drilling platform) Jan. 1, 2020 select an account title to recognize the retirement liability on January 1 enter a debit amount enter a credit amount select an account title to recognize the retirement liability on January 1 enter a debit amount enter a credit amount (To recognize the retirement liability) Prepare any journal entries required for the platform and the asset retirement obligation at December 31, 2020. (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. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Date Account Titles and Explanation Debit Credit Dec. 31, 2020 select an account title to record depreciation expense on December 31 enter a debit amount enter a credit amount select an account title to record depreciation expense on December 31 enter a debit amount enter a credit amount (To record depreciation expense) Dec. 31, 2020 select an account title to record interest expense on December 31 enter a debit amount enter a credit amount select an account title to record interest expense on December 31 enter a debit amount enter a credit amount (To record interest expense) Dec. 31 select an account title to record production of oil inventory on December 31 enter a debit amount enter a credit amount select an account title to record production of oil inventory on December 31 enter a debit amount enter a credit amount (To record production of oil inventory) Prepare any journal entries required for the platform and the asset retirement obligation at December 31, 2021. (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. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Date Account Titles and Explanation Debit Credit Dec. 31, 2021 select an account title to record depreciation expense on December 31 enter a debit amount enter a credit amount select an account title to record depreciation expense on December 31 enter a debit amount enter a credit amount (To record depreciation expense) Dec. 31, 2021 select an account title to record interest expense on December 31 enter a debit amount enter a credit amount select an account title to record interest expense on December 31 enter a debit amount enter a credit amount (To record interest expense) Dec. 31, 2021 select an account title to record production of oil inventory on December 31 enter a debit amount enter a credit amount select an account title to record production of oil inventory on December 31 enter a debit amount enter a credit amount (To record production of oil inventory) Assume that on December 31, 2025, Ayayai dismantles and removes the platform at a cost of $783,700. Prepare the journal entry to record the settlement of the asset retirement obligation. Also assume its carrying amount at that time is $807,500. (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. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Date Account Titles and Explanation Debit Credit Dec. 31, 2025 select an account title for the journal entry on December 31 enter a debit amount enter a credit amount select an account title for the journal entry on December 31 enter a debit amount enter a credit amount select an account title for the journal entry on December 31 enter a debit amount enter a credit amount Prepare the journal entries to record the acquisition of the drilling platform, and the asset retirement obligation for the platform, on January 1, 2020, assuming that Ayayai prepares financial statements in accordance with ASPE. An appropriate interest or discount rate is 8%. (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. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Date Account Titles and Explanation Debit Credit Jan. 1, 2020 select an account title to record the cost of drilling platform on January 1 enter a debit amount enter a credit amount select an account title to record the cost of drilling platform on January 1 enter a debit amount enter a credit amount (To record the cost of drilling platform) Jan. 1, 2020 select an account title to recognize the retirement liability on January 1 enter a debit amount enter a credit amount select an account title to recognize the retirement liability on January 1 enter a debit amount enter a credit amount (To recognize the retirement liability) Prepare any journal entries required for the platform and the asset retirement obligation at December 31, 2020, assuming that Ayayai prepares financial statements in accordance with ASPE. (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. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Date Account Titles and Explanation Debit Credit Dec. 31, 2020 select an account title to record depreciation expense on December 31 enter a debit amount enter a credit amount select an account title to record depreciation expense on December 31 enter a debit amount enter a credit amount (To record depreciation expense) Dec. 31, 2020 select an account title to record accretion expense on December 31 enter a debit amount enter a credit amount select an account title to record accretion expense on December 31 enter a debit amount enter a credit amount (To record accretion expense) Dec. 31, 2020 select an account title to adjust asset retirement obligation on December 31 enter a debit amount enter a credit amount select an account title to adjust asset retirement obligation on December 31 enter a debit amount enter a credit amount (To adjust asset retirement obligation) Prepare any journal entries required for the platform and the asset retirement obligation at December 31, 2021, assuming that Ayayai prepares financial statements in accordance with ASPE. (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. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Date Account Titles and Explanation Debit Credit Dec. 31, 2021 select an account title to record depreciation expense on December 31 enter a debit amount enter a credit amount select an account title to record depreciation expense on December 31 enter a debit amount enter a credit amount (To record depreciation expense) Dec. 31, 2021 select an account title to record accretion expense on December 31 enter a debit amount enter a credit amount select an account title to record accretion expense on December 31 enter a debit amount enter a credit amount (To record accretion expense) Dec. 31, 2021 select an account title to adjust asset retirement obligation on December 31 enter a debit amount enter a credit amount select an account title to adjust asset retirement obligation on December 31 enter a debit amount enter a credit amount (To adjust asset retirement obligation) Assume that on December 31, 2025, Ayayai dismantles and removes the platform for a cost of $783,700. Prepare the journal entry to record the settlement of the asset retirement obligation, assuming that Ayayai prepares financial statements in accordance with ASPE. Also assume its carrying amount at that time is $807,500. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Date Account Titles and Explanation Debit Credit Dec. 31, 2025 select an account title for the journal entry on December 31 enter a debit amount enter a credit amount select an account title for the journal entry on December 31 enter a debit amount enter a credit amount select an account title for the journal entry on December 31 enter a debit amount enter a credit amount