Just need help with part B (b)Prepare any journal entries required for the depot and the asset retirement obligation at December 31, 2020. Crane usesstraight-line depreciation; the estimated salvage value for the depot is zero. (Round answers to 0 decimal places, e.g. 5,275. If noentry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented whenamount is entered. Do not indent manually.)DateAccount Titles and ExplanationDebitCreditDecember31, 2020(To record depreciation for the depot)December31, 2020(To record depreciation on asset retirement obligation)December31, 2020(To record interest on asset retirement obligation)eTextbook and Media Crane Company purchases an oil tanker depot on January 1, 2020, at a cost of $639,700. Crane expects to operate the depot for 10years, at which time it is legally required to dismantle the depot and remove the underground storage tanks. It is estimated that it willcost $69,980 to dismantle the depot and remove the tanks at the end of the depot's useful life.(a)Your answer is correct.Prepare the journal entries to record the depot and the asset retirement obligation for the depot on January 1, 2020. Based on aneffective-interest rate of 6%, the present value of the asset retirement obligation on January 1, 2020, is $39,076. (If no entry isrequired, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented whenamount is entered. Do not indent manually.)Date.Account Titles and ExplanationDebitCreditJanuary 1,Plant Assets6397002020Cash639700(To record the depot)January 1,Plant Assets390762020Asset Retirement Obligation39076(To record the asset retirement obligation).

Depreciation means the amount fixed assets written off due to normal wear and tear , normal usage , change in technology etc. Depreciation is charged in books of accounts only when assets is ready to use. JOURNAL ENTRIES IN THE BOOKS OF CRANE COMPANY Date Particulars Amount Dr. Amount Cr. December 31 , 2020 Depreciation expense A/c _____Dr. (639700/10) 63,970 - To Plant Assets A/c - 63,970 (To record depreciation for the depot) December 31 , 2020 Depreciation expense A/c _____Dr. (39076/10) 3,908 - To Plant Assets A/c - 3,908 (To record depreciation for asset retirement obligation) December 31 , 2020 Interest expenses A/c ___________Dr. (39076*6%) 2,345 - To Assets retirement obligation A/c - 2,345 (To record interest on assets retirement obligation)

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(b) Prepare any journal entries required for the depot and the asset retirement obligation at December 31, 2020. Crane uses straight-line depreciation; the estimated salvage value for the depot is zero. (Round answers to 0 decimal places, eg. 5,275. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit December 31, 2020 (To record depreciation for the depot) December 31, 2020 (To record depreciation on asset retirement obligation) December 31, 2020 (To record interest on asset retirement obligation)

(b) Prepare any journal entries required for the depot and the asset retirement obligation at December 31, 2020. Crane uses straight-line depreciation; the estimated salvage value for the depot is zero. (Round answers to 0 decimal places, eg. 5,275. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit December 31, 2020 (To record depreciation for the depot) December 31, 2020 (To record depreciation on asset retirement obligation) December 31, 2020 (To record interest on asset retirement obligation)

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Consumer Credit Counseling Services

Credit counseling teaches consumers about credit, budgeting, money management, and debt management. The counselor ensures that consumers can pay off their debts without declaring bankruptcy. Counselors also assist the negotiator, who negotiates with creditors on behalf of their clients to reduce interest rates on outstanding debt. Counselors can offer credit counseling to customers before or after they take on debt. Consumer Credit Counseling Services (CCCS) is a non-profit organization that offers credit counseling services. Some organizations can also be for profit. This type of organization comprises a group of professionals who are skilled negotiators.

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Just need help with part B

(b)
Prepare any journal entries required for the depot and the asset retirement obligation at December 31, 2020. Crane uses
straight-line depreciation; the estimated salvage value for the depot is zero. (Round answers to 0 decimal places, e.g. 5,275. If no
entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when
amount is entered. Do not indent manually.)
Date
Account Titles and Explanation
Debit
Credit
December
31, 2020
(To record depreciation for the depot)
December
31, 2020
(To record depreciation on asset retirement obligation)
December
31, 2020
(To record interest on asset retirement obligation)
eTextbook and Media

Crane Company purchases an oil tanker depot on January 1, 2020, at a cost of $639,700. Crane 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 $69,980 to dismantle the depot and remove the tanks at the end of the depot's useful life.
(a)
Your answer is correct.
Prepare the journal entries to record the depot and the asset retirement obligation for the depot on January 1, 2020. Based on an
effective-interest rate of 6%, the present value of the asset retirement obligation on January 1, 2020, is $39,076. (If no entry is
required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when
amount is entered. Do not indent manually.)
Date.
Account Titles and Explanation
Debit
Credit
January 1,
Plant Assets
639700
2020
Cash
639700
(To record the depot)
January 1,
Plant Assets
39076
2020
Asset Retirement Obligation
39076
(To record the asset retirement obligation).

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