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 $900,000 on January 1, 2020. The 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 $90,000. The appropriate discount rate for the company is 12%. Answer the following questions, rounding your answers to the nearest whole number. a. Record the storage tank asset and the related asset retirement obligation on January 1, 2020. b. Record any required adjusting entries on December 31 2020. C. Assume that on December 31, 2035, the tank is safely removed at a cost of $103,500. Record the required journal entry. a. Cr. Dr. 90,000 X 0 0 90,000 x Account Name Equipment Cash To record purchase of storage tank. Equipment Asset Retirement Obligation To record asset retirement obligation. 7,308 % 0 0 7,308 x b. Dr. Cr. . 60,487 x 0 X 0 X Account Name Depreciation Expense Equipment To record depreciation. Interest Expense Asset Retirement Obligation To record accretion. X X 0 0 X C. Cr. Account Name Asset Retirement Obligation Loss on Settlement of Asset Retirement Obligation Dr. 90,000 13,500 0 07 Cash . 0 103,500