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Swifty Processes is involved with innovative approaches to finding energy reserves. Swifty recently built a facility...

Swifty Processes is involved with innovative approaches to finding energy reserves. Swifty recently built a facility to extract natural gas at a cost of $11.1 million. However, Swifty is also legally responsible to remove the facility at the end of its useful life of twenty years. This cost is estimated to be $18 million (the present value of which is $7.0 million). What is the journal entry required to record the asset retirement obligation?

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solution Jounal entry & Debit Credit 70ooooo Natural Gas facility Asset Retirement obligation 7000000

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