Martinez Corporation acquired the right to mine a piece of land at a cost to lease...
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Martinez Corporation acquired the right to mine a piece of land at a cost to lease of $594,000. The related excavation costs were $990,000, while developmental costs were an additional $7,916,000, all of which will contribute Martinez extracting 25,000 tonnes. In the first year of operations Martinez mined and sold 5,000 tonnes, while in its second year the company extracted 6,500 tonnes but only sold 6,000 tonnes. Prepare the journal entry to record depletion expense for the first two years. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List all debit entries before credit entries.) Date Account Titles Year 1 Year 2 Debit Credit Martinez Corporation acquired the right to mine a piece of land at a cost to lease of $594,000. The related excavation costs were $990,000, while developmental costs were an additional $7,916,000, all of which will contribute Martinez extracting 25,000 tonnes. In the first year of operations Martinez mined and sold 5,000 tonnes, while in its second year the company extracted 6,500 tonnes but only sold 6,000 tonnes. Prepare the journal entry to record depletion expense for the first two years. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List all debit entries before credit entries.) Date Account Titles Year 1 Year 2 Debit Credit
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Year 1 Depletion Expense 594000 25000 tonnes 2376 per ton Journal Entry Debit Depletion Expense 23... View the full answer
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