Tra Processes Is Involved with Innovative Approaches to Finding Energy

question 158

Multiple Choice

tra Processes is involved with innovative approaches to finding energy reserves. Xtra recently built a facility to extract natural gas at a cost of $15 million. However, Xtra 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 $21,000,000
• C) 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.

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Definitions:

Agreeableness

A personality trait characterized by trust, altruism, kindness, affection, and other prosocial behaviors.

Major Life Events

Significant occurrences in a person's life that have the potential to influence mental health and well-being.

Conscientious

Describing a person who shows diligence and a willingness to do what is right.

Neurotic

A term relating to neurosis, involving long-term tendencies to experience negative emotional states like anxiety, depression, or irritability.