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What expense should be recorded

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Question - A company buys an oil rig for E1,000,000 on January 1, 2019. The life of the rig is 10 years and the expected cost to dismantle the rig at the end of 10 years is (200,000 (present value at 10% is (77,110). 10% is an appropriate interest rate for this company.

Requited -

(i) What expense should be recorded for 2019 as a result of these events?

(ii) What expense should be recorded for 2020 as a result of these events?

(iii) What amount of environmental liability would be reflected on the 2019 statement of financial position?

Reference no: EM132526870

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