Cannon Mountain Mining paid $462,300 for the right to extract mineral assets from a 400,000-ton deposit. In

Question:

Cannon Mountain Mining paid $462,300 for the right to extract mineral assets from a 400,000-ton deposit. In addition to the purchase price, Cannon also paid a $900 filing fee, a $1,800 license fee to the state of Nevada, and $55,000 for a geological survey of the property. Because Cannon purchased the rights to the minerals only and did not purchase the land, it expects the asset to have zero residual value. During the first year, Cannon removed and sold 50,000 tons of the minerals. Make journal entries to record

(a) Purchase of the minerals (debit Minerals),

(b) Payment of fees and other costs,