On January $1,$ Thermal Power Incorporated builds a nuclear plant $50$ miles outside of Timmins, Ontario that it is legally required to dismantle and remove at the end of its $40-$year useful life. The total cost of dismantling and removing the plant is estimated at $$650,000,000.$ The discount rate is $12\%.$ Which of the following entries would be used to record the interest liability relating to the asset retirement obligation at the end of year one using ASPE? $($Round to the nearest whole number.$)$

Answer

Dr$.$ Interest expense $$838,250$

Dr$.$ Asset Retirement Obligation $$838,250$

Dr$.$ Accretion Expense $$838,250$

Dr$.$ Interest Expense $$1,950,000$