On 1 July 2021, Bells Beach Tourist Operations acquired an aircraft that can be used for taking wealthy surfers to remote surfing destinations with lovely waves and limited crowds. The aircraft cost $12 000 000. An engineer’s analysis commissioned by the company determined that the aircraft could be broken down into the following components: airframe, engines and fittings. The airframe comprised 55 per cent of the cost, while the engines were 40 per cent of the cost, with the fittings comprising 5 per cent of the cost. The airframe is estimated to have a useful life of 15 years. At the end of its useful life it will have an estimated scrap value of $150 000. The engines have an estimated useful life of 20 000 hours, while the fittings are expected to have a useful life of five years. Both the engines and the fittings are expected to have no residual value at the end of their useful lives. During the first year the aircraft was operating for 2920 hours.

REQUIRED

Prepare all journal entries necessary to account for the acquisition of the aircraft, and its depreciation, for the year ending 30 June 2022.