On January 1, 2022, Glencore Company purchases a gold mine for $16,000 by issuing a four-...

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On January 1, 2022, Glencore Company purchases a gold mine for $16,000 by issuing a four- year, 5% interest note. Interests are payable annually starting Jaunary 1, 2023. The mine is estimated to have 40 million tons of gold and no residual value. On April 1, 2022, the company pays $4,000 cash for substantially increasing the operating efficiency of the mine. The company starts extracting gold on May 1, and extracts 3 million tons of gold during 2022. However, none of the gold is sold during the year. When recognizing depreciation, amortization, or depletion, the company does not directly reduce an asset account. Required: Prepare all necessary journal entries. Make sure to include the adjusting entry (or entries) at December 31, the fiscal-year-end. (Note: Write "no entry" when no entry is required.) Debit Credit Date Jan. 1, 2022 Apr. 1, 2022 Dec. 31, 2022 (Adjusting entry or entries) On January 1, 2022, Glencore Company purchases a gold mine for $16,000 by issuing a four- year, 5% interest note. Interests are payable annually starting Jaunary 1, 2023. The mine is estimated to have 40 million tons of gold and no residual value. On April 1, 2022, the company pays $4,000 cash for substantially increasing the operating efficiency of the mine. The company starts extracting gold on May 1, and extracts 3 million tons of gold during 2022. However, none of the gold is sold during the year. When recognizing depreciation, amortization, or depletion, the company does not directly reduce an asset account. Required: Prepare all necessary journal entries. Make sure to include the adjusting entry (or entries) at December 31, the fiscal-year-end. (Note: Write "no entry" when no entry is required.) Debit Credit Date Jan. 1, 2022 Apr. 1, 2022 Dec. 31, 2022 (Adjusting entry or entries)

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Here are the journal entries for the purchase of the gold mine January 1 2022 Debit Gold Mine Asset ... View the full answer