[Answer] Recycle Exploration is involved with innovative approaches to finding energy reserves. Recycle recently built a facility to extract natural gas at a cost of $15 million. However Recycle is also legally responsible to remove the facility at the end of its useful life of twenty years. This cost is estimated to be $21 million (the present value of which is $8 million). What is the journal entry required to record the asset retirement obligation?a. No journal entry required.b. Debit Natural Gas Facility for $21 000 000 and credit Asset Retirement Obligation for $21 000 000c. Debit Natural Gas Facility for $6 000 000 and credit Asset Retirement Obligation for $6 000 000.d. Debit Natural Gas Facility for $8 000 000 and credit Asset Retirement Obligation for $8 000 000. Savarese Ch 12: Myofascial Technique

Answer: d
Recycle Exploration is involved with innovative approaches to finding energy reserves. Recycle recently built a facility to extract natural gas at a cost of $15 million. However Recycle is also legally responsible to remove the facility at the end of its useful life of twenty years. This cost is estimated to be $21 million (the present value of which is $8 million). What is the journal entry required to…

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