Colorado Mines paid $498,500 for the right to extract ore from a 200,000-ton mineral deposit. In addition

Question:

Colorado Mines paid $498,500 for the right to extract ore from a 200,000-ton mineral deposit. In addition to the purchase price, Colorado Mines also paid a $500 filing fee, a $1,000 license fee to the state of Colorado, and $60,000 for a geologic survey of the property. Because the company purchased the rights to the minerals only, it expected the asset to have zero residual value when fully depleted. During the first year of production, Colorado Mines removed 80,000 tons of ore. Make journal entries to record

(a) Purchase of the mineral rights,

(b) Payment of fees and other costs,