Question: I have the answer to this problem, but I don't understand how to work the problem to get to that solution. AP101 Smithfield mines purchased

I have the answer to this problem, but I don't understand

I have the answer to this problem, but I don't understand how to work the problem to get to that solution.

AP101 Smithfield mines purchased the mineral rights to a gold mine for $2,000,000 on 1230-2020. Smithfield will be required to pay restoration costs when the mine is depleted in 10 years. Smithfield estimates that there is a 40% probability that the restoration costs will be $1,000,000 and a 60% probability that restoration costs will be $1,500,000. An appropriate interest rate is 10%. Record the 12302020 journal entry(ies) and describe how the relevant accounts would be reported in the 2020 financial statements

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