On January 1st, 2019, ABC Inc. purchased a copper mine for $400,000. The company is required by provincial law to restore the land on which the mine is located to its initial condition at the end of the mine's ten-year useful life. Restoration costs are estimated to be $35,000. ABC is subject to an interest rate of 5%. ABC Inc uses straight-line deprecation and follows IFRS.

Required

Prepare the journal entries required on January 1st and December 31st, 2019, and the journal entry for December 31, 2020. Round all entries to the nearest dollar.

Answer rating: 100% (QA)

IFRS recquires the present value of future restoration to be recognised in the cost of land at initi... View the full answer