Midnight Boil Ltd sells electricity generated from its nuclear power plant. Its managing director, Peter Polly, is not overly concerned about the environment but nevertheless knows that the company has a legal obligation to clean up the site in 20 years’ time when the plant is shut on 30 June 2043. As at 30 June 2023, the best estimate to clean up the site (in 2043) is $10 500 000. One year later, on 30 June 2024, the best estimate at cleaning up the site (in 19 years’ time) is still considered to be $10 500 000.

The pre-tax rates that reflect current market assessments of the time value of money and the risks specific to the liability were 7 per cent as at 30 June 2023 and 6 per cent as at 30 June 2024.

REQUIRED

Provide the journal entries in relation to the above obligation for the years ending 30 June 2023 and 30 June 2024.