On June 1, the company exchanged its accounts parable of $90,000 with Rao Compan

Question

On June 1, the company exchanged its accounts parable of $90,000 with Rao Company, for a one year, zero coupon note with a maturity value of $100,000 Prepare the journal entry tor June 1 In January 2016, Deep Sea Oil Inc., builds and began operating an oil drilling platform in the Gull of Mexico. The company expects to operate the platform for 5 years and will be required to remove the platform at the end of 5 years at an expected cost of $2,000,000. Assuming that the discount rate is 8% Prepare the journal entry to record the asset retirement obligation (ARO) to January 2016 Prepare the journal entry to record the annual depreciation in 2016 and adjustment to the ARO. Prepare the 5-year amortization schedule for the ARO Assume that at the end of 5 years, it costs the company $2,125,000 to remove to the platform. Prepare the entry (assume payment is in cash)

Explanation / Answer

1)

Account Tiltle & Explanation Debit Credit Zero Coupon Bond 100000 Account Receivable 90000 Discount on Zero Coupon Bond 10000

Related Questions

Navigate

• Browse (All)
• Browse O
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.