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Prepare all journal entries related to asset for the years

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Question - Sahel Co., a publicly traded entity, just completed the construction of an asset on January 1, 2021, at a total cost of $60,000,000. Legal fees during the construction wer: $50,000. The expected useful life of the asset is 50 years after which it will have to be decommissioned (dismantled) at an expected cost of $10,000,000. The relevant discount rate is 4%. Sahel uses the straight line method of depreciation.

a. Prepare all journal entries related to the asset for the years 2021 and 2022.

b. During 2028, the estimate to decommission the asset changes and is now estimated to be $20,000,000. In addition, the estimate of the discount rate has increased to 5%. Prepare all the journal entries in 2028.

Reference no: EM133136823

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