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Exercise 13-14 Bonita Company purchases an oll tanker depot on January 1, 2017, at a cost of $565,700. Bonita expects to operate the depot for 10 years, at which time it is legally required to dismantle the depot and remove the underground storage tanks. It is estimated that it will cost $58,430 to dismante the depct and remove the tanks at the end of the depot's useful life Prepare the oumal ent es to record the depot considered a plant asset and the asset retirement obligation for the depot on January 1, 2017. Based on an ettective-interest ate of 7 the present value of the asset retirement obliga on on January 1 2017, is S34 786 entry is required, select No Entry for the account titles ard enter 0 for the amounts Credit account titles are automatically inde ted whe amount is entered. Do not indent manually. Date Account Titles and Explanation Debit Credit anuary 1, 2017 To record the depot) anuary 1, 2017 To record the asset retrement obligation) LIST OF NCOOUNTS Prepare any journal entries required for the depat and the asset retirement obligation at December 31, 2017. Bonita uses straight-line depreciation; the estimated salvage value for the depot is zero. (Round ansvers to 0 decimal places, e.g. 5,275If no entry is required, select No Entry for the account titles and enter 0 for the mounts Credit account titles are automatically Indented when 0untis entered. Do not indent manually. Date Account Titles and Explanation Debit Credit December 31, 2017 To record depreciation for the depot December 31, 2017 To record depreciation on asset retirement obligation) December 31, 2017 To record intarest on asset retiremant ablgation) On December 31, 2026, Bonita pays a demolition firm to dismantle the depot and remove the tanks at a price of $72,340. Prepare the journal entry for the settlement of the asset retirement abligation. (Round answers to O decimal places, e.g. 5,27S. If no entry is required, select "No Entry" for the account titles and enter D for the amounts. Credit account titles are automatically indented when amount is entered. Do nat indent manually.) re automaticaliy Account Titles and Explanation Debit Credit December 31, 2026 Exercise 13-14 Accounts Payable Accounts Receivable Accumulated Depreciation-Plant Assets Allowance from Expropriation Asset Retirement Obligation Cash Depreciation Expense Dividends Payable Due to Customer Discount on Notes Payable FICA Taxes Payable Freight-Irn FUTA Taxes Payable Insurance Premium Payable Interest Expense Interest Payable Inventory Inventory of Premiums Land Improvements Lawsuit Liability Lawsuit Loss Litigation Expense or Loss Litigation Liability Loss from Expropriation Loss on ARO Settlement No Entry Notes Payable Oil Platform Payroll Tax Expense Plant Assets Premium Expense Premium Liability Purchases Purchase Discounts Purchase Returns and Allowances Retained Earnings Salaries and Wages Expense Salaries and Wages Payable Sales Revenue Sales Tax Payable SUTA Taxes Payable Trucks Unearned Sales Revenue Unearned Warranty Revenue Union Dues Payable Warranty Expense Warranty Liability Warranty Revenue Withholding Taxes Payable
