Crane Gas Co. purchases a gas station and convenience store on January 1, 2017, at a cost of $753,000. Crane expects to operate the store and gas station for 20 years. The company is legally required to remove the underground gas storage tanks from the facility at the end of its useful life. Crane estimates that it will cost $103,000 to remove the tanks at the end of the facility's useful life. Prepare the journal entries to record the purchase of the gas station/convenience store, as well as the asset retirement obligation for the gas station/convenience store on January 1, 2017. Based on an effective-interest rate of 8%, the present value of the asset retirement obligation on January 1, 2017, is $22,142. (If no entry is required, select "No Entry" for the neenunt titloe and onter n for the amaunte Credit account titles are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit (To record the depot) (To record the asset retirement obligation)

Crane Gas Co. purchases a gas station and convenience store on January 1, 2017, at a cost of $753,000. Crane expects to operate the store and gas station for 20 years. The company is legally required to remove the underground gas storage tanks from the facility at the end of its useful life. Crane estimates that it will cost $103,000 to remove the tanks at the end of the facility's useful life. Prepare the journal entries to record the purchase of the gas station/convenience store, as well as the asset retirement obligation for the gas station/convenience store on January 1, 2017. Based on an effective-interest rate of 8%, the present value of the asset retirement obligation on January 1, 2017, is $22,142. (If no entry is required, select "No Entry" for the neenunt titloe and onter n for the amaunte Credit account titles are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit (To record the depot) (To record the 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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