Question

The Town of Conway opened a solid waste landfill in 1995 that is filled to capacity in the current year. The city initially anticipated closure costs of $2 million. These costs were not expected to be incurred until the landfill was closed. What is the final journal entry to record these costs assuming the estimated $2 million closure costs were properly recorded and the landfill is accounted for in an enterprise fund

Answer 1

Answer and Explanation:

Data provided

Initially anticipated closure costs = $2,000,000

The journal entry is shown below:-

Landfill Closure Liability Dr, $2,000,000

To Cash $2,000,000

(Being landfill closure liability is recorded)

Therefore we debited the landfill closure liability as it decrease the liability and we credited the cash as decreases the assets.