QUESTION 2 Entity A is a local construction company, which provides construction services to different types of customers. To prepare for the company development, Entity A is now planning to acquire additional plants and equipment On 16 December 2017, Entity A ordered a concrete plant from Entity B. The listed price of the plant is $1,360,000 for general customers Entity A is one of Entity B's loyal customers. Entity B always offers a 25% trade discount to Entity A. According to the local environmental protection regulation, Entity A is required to remove the concrete plant at the end of the reporting period of 2022. The removal cost of $10,200 and the concrete plant residual value of $8,026 were both estimated at the inception of the contract. The plant was delivered to Entity A on 1 January 2018. According to the contract, Entity B provides a 3-month credit period to Entity A Finally, Entity A fully settled the outstanding amount on 1 February 2018. Installation and testing services are required to make the plant ready for use. On 1 January 2018, Entity C, the installation and testing service provider completed the concrete plant installation and testing services and certified the plant was really for use by Entity A. The cost of installation and testing services is $24,000 and it was settled with Entity C by cheque on 1 January 2018. At the inception stage, Entity A expected the useful life of the concrete plant is 5 years. On 31 December 2022, the removal cost incurred was the same as the estimated amount and it will be paid in the first week of 2023, Finally, the residual of the concrete plant was sold for $9,000. A cheque was received on the same date. Entity A always applies to discount with a rate of 9.21%. The end of the reporting period is 31 December. Entity A adopts the cost model and the straight-line depreciation method for the measurement of the concrete plant. REQUIRED: According to relevant accounting standards, prepare journal entries to record the transactions of Entity A on 16 December 2017, 31 December 2017, 1 January 2018, 1 February 2018, 31 December 2018, 1 January 2020 and 31 December 2020, 1 January 2022 and 31 December 2022 respectively. ACCOUNTS FOR INPUT: IPPE Bank Inventory Revenue Cost of sales Payable | Receivable Restoration liability Interest expense Interest revenue Depreciation Accum depreciation Loss on disposal Gain on disposal Other expense Other income Share capital Retained earnings No enty ANSWERS: Journal Entries: Date Account Name Debit (5) Credit (5) Hints For Sequence 16-Dec-17 No entry 0 No entry 0 31-Dec-17 No entry 0 No entry 0 1-Jan-18 PPE Payable A Liability. Judge Dr/Cr side. Input Amount Only Bank An Asset. Judge Dr/Cr side. Input Amount Only. Restoration liability A Removal Liability 1-Feb-18 Payable Bank 31-Dec-18 Interest expense Restoration liability A Removal Liability 31-Dec-18 Depreciation Accum. depreciation 1-Jan-20 No entry 0 No entry 0 31-Dec-20 Interest expense Restoration liability A Removal Liability 31-Dec-20 Depreciation Accum. depreciation 1-Jan-22 No entry No entry 31-Dec-22 Interest expense Restoration liability A Removal Liability 31-Dec-22 Depreciation Accum. depreciation 31-Dec-22 Restoration liability A Removal Liability Bank 31-Dec-22 Bank Loss on disposal Accum. depreciation Judge Dr/Cr side. Input Amount Only PPE An Asset