In: Finance
Concord Corp. erected and placed into service an offshore oil
platform on January 1, 2020, at a cost of $10 million. Concord is
legally required to dismantle and remove the platform at the end of
its 8-year useful life. Concord estimates that it will cost $1
million to dismantle and remove the platform at the end of its
useful life and that the discount rate to use should be 8%. Using
(a) factor Table A.2, (b) a financial calculator, or (c) Excel
function PV, prepare the entry to record the asset retirement
obligation. Assume that none of the $1 million cost relates to
production. (Round factor values to 5 decimal places,
e.g. 1.25124 and final answer to 0 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 0 for the
amounts.)
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.