Pronghorn Corp. erected and placed into service an offshore oil platform on January 1, 2023, at a cost of $11 million. Pronghorn is legally required to dismantle and remove the platform at the end of its 9 year useful life. Pronghorn estimates that it will cost $1.1 million to dismantle and remove the platform at the end of its useful life and that the discount rate to use should be 7%. Assume that the increase in the asset retirement obligation in 2023 related to the production of oil in 2023 was $62,986. (a) Your answer is partially correct. Prepare any necessary entry to record the increase in the asset retirement obligation at December 31, 2023, assuming that Pronghorn follows IFRS. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. List debit entry before credit entry. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.)

Pronghorn Corp. erected and placed into service an offshore oil platform on January 1, 2023, at a cost of $11 million. Pronghorn is legally required to dismantle and remove the platform at the end of its 9 year useful life. Pronghorn estimates that it will cost $1.1 million to dismantle and remove the platform at the end of its useful life and that the discount rate to use should be 7%. Assume that the increase in the asset retirement obligation in 2023 related to the production of oil in 2023 was $62,986. (a) Your answer is partially correct. Prepare any necessary entry to record the increase in the asset retirement obligation at December 31, 2023, assuming that Pronghorn follows IFRS. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. List debit entry before credit entry. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.)

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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