On January 1, 2020, Concord Corporation erected a drilling platform at a cost of $6,006,000. Concord is legally required to dismantle and remove the platform at the end of its 6 year useful life, at an estimated cost of $1,045,000. Concord 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 $35,561 and $38,405, respectively. The estimated residual value of the drilling platform is zero, and Concord uses straight-line depreciation. Concord 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. 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, 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 O 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 O for the amounts.) Date Account Titles and Explanation Jan. 1, 2020 Drilling Platform Cash (To record the cost of drilling platform) Debit 6006000 Credit 6006000 Jan. 1, 2020 Drilling Platform Asset Retirement Obligation (To recognize the retirement liability) eTextbook and Media List of Accounts * Your answer is incorrect. Prepare any journal entries required for the platform and the asset retirement obligation at December 31, 2020. (Round answers to O 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 O for the amounts.) Date Dec. 31, 2020 Account Titles and Explanation Debit Credit Dec. 31, 2020 (To record depreciation expense) Dec. 31 (To record interest expense) (To record production of oil inventory) eTextbook and Media List of Accounts * Your answer is incorrect. Prepare any journal entries required for the platform and the asset retirement obligation at December 31, 2021. (Round answers to O 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 O for the amounts.) Dec. 31, 2020 (To record depreciation expense) Dec. 31 (To record interest expense) (To record production of oil inventory) eTextbook and Media List of Accounts * Your answer is incorrect. Prepare any journal entries required for the platform and the asset retirement obligation at December 31, 2021. (Round answers to O 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 O for the amounts.) Date Dec. 31, 2021 Account Titles and Explanation Debit Credit Dec. 31, 2021 (To record depreciation expense) Dec. 31, 2021 (To record interest expense) (To record production of oil inventory) Assume that on December 31, 2025, Concord dismantles and removes the platform at a cost of $1,014,200. Prepare the journal entry to record the settlement of the asset retirement obligation. Also assume its carrying amount at that time is $1,045,000. (Round answers to O 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 O for the amounts.) Date Dec. 31, 2025 Account Titles and Explanation Debit Credit 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 Concord prepares financial statements in accordance with ASPE. An appropriate interest or discount rate is 8%. (Round answers to O 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 O for the amounts.) Date Account Titles and Explanation Jan. 1, 2020 Jan. 1, 2020 (To record the cost of drilling platform) (To recognize the retirement liability) Debit Credit Prepare any journal entries required for the platform and the asset retirement obligation at December 31, 2020, assuming that Concord prepares financial statements in accordance with ASPE. (Round answers to O 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 O for the amounts.) Date Dec. 31, 2020 Account Titles and Explanation Dec. 31, 2020 (To record depreciation expense) Dec. 31, 2020 (To record accretion expense) (To adjust asset retirement obligation) Debit Credit Prepare any journal entries required for the platform and the asset retirement obligation at December 31, 2021, assuming that Concord prepares financial statements in accordance with ASPE. (Round answers to O 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 O for the amounts.) Date Dec. 31, 2021 Account Titles and Explanation Dec. 31, 2021 (To record depreciation expense) Dec. 31, 2021 (To record accretion expense) (To adjust asset retirement obligation) Debit Credit Assume that on December 31, 2025, Concord dismantles and removes the platform for a cost of $1,014,200. Prepare the journal entry to record the settlement of the asset retirement obligation, assuming that Concord prepares financial statements in accordance with ASPE. Also assume its carrying amount at that time is $1,045,000. (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 O for the amounts.) Date Dec. 31, 2025 Account Titles and Explanation Debit Credit