Recording Asset Retirement Obligation

BPP Company maintains underground storage tanks for its operations. A new storage tank was installed and made ready for use at a cost of $$2,000,000$ on January $1$ of the current year. The tank$\text{'}$s useful life is estimated at $15$ years, at which time the company is legally required to remove the tank and restore the area at an estimated cost of $$200,000.$ The appropriate discount rate for the company is $12\%.$

Required

a$.$ On January $1,$ record the entry for $(1)$ the purchase and installation of the storage tank and $(2)$ the related asset retirement obligation.

b$.$ Record adjusting entries on December $31$ of the current year for $(1)$ depreciation and $(2)$ accretion.

c$.$ Assume that on December $31,$ fifteen years later, the tank is safely removed at a cost of $$230,000.$ Record the required journal entry.

Note: Round answers to the nearest whole dollar.

$\backslash$table$[[$Account Name$],[$a$.1.$ Jan. $1,$Equipment,$vv,2000,000,0,1+$