Homework Answers
| PV Factor for 16 years @6% | 1/(1.16)^16= | 0.09304053 | |
| Value of restoration Cost to be capitalized | 6300000*0.093041 | 586,158.30 | |
| Date | Particulars | Debit | Credit |
| 01 jan 20x2 | Land A/c Dr. | 586,158.30 | |
| To, Provision for restoration Cost | 586,158.30 | ||
| 31 dec 20x2 | Interest(unwinding Cost) A/c Dr. | 35,169.50 | |
| To, Provision for restoration Cost | 35,169.50 | ||
| (Unwinding cost 586158.30*6%) | |||
| 31 dec 20x2 | Profit and Loss A/c Dr. | 35,169.50 | |
| To, Interest(Unwinding Cost) A/c | 35,169.50 | ||
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