1. The Edison Company spent $13,000 during the year for experimental purposes in connection with the development of a new product 2 In April, the Marshall Company lost a patent Infringement sult and paid the plaintiff $8.000. 3. In March, the Cleanway Laundromat bought equipment. Cleanway pald $7.000 down and signed a noninterest-bearing note requiring the payment of $18,500 in nine months. The cash price for this equipment was $24.000, 4. On June 1, the Jamsen Corporation Installed a sprinkler system throughout the building at a cost of $29.000. 5. The Mayer Company, plaintiff, pald $13,000 in legal fees in November, in connection with a successful infringement suit on its patent 6. The Johnson Company traded its old equipment for new equipment. The new equipment has a fair value of $10,300. The old equipment had an original cost of $7,900 and a book value of $3,300 at the time of the trade. Johnson also paid cash of $8,200 part of the trade. The exchange has commercial substance. Required: Prepare journal entries to record each of the above transactions. Complete this question by entering your answers in the tabs below. Transactions 1 to 5 Transaction 6 Prepare journal entries to record each of the above transactions 1 to 5. (If no entry is recaired for a transaction/event, select "No journal Entry required in the first account field.) Vow transaction ist Journal entry worksheet 2 3 In March the Cleanway Laundromat bought equipment. Cleanway paid 57.000 down and signed a noninterest-bearing note requiring the payment of $18.500 in nine months. The cash price for this equipment was 524.000. General Journal Debit Credit 1. The Edison Company spent $13,000 during the year for experimental purposes in connection with the development of a new product 2 In April, the Marshall Company lost a patent Infringement sult and paid the plaintiff $8,000. 3. In March, the Cleanway Laundromat bought equipment Cleanway pald $7.000 down and signed a noninterest-bearing note requiring the payment of $18,500 in nine months. The cash price for this equipment was $24.000 4. On June 1, the Jamsen Corporation Installed a sprinkler system throughout the building at a cost of $29.000 5. The Mayer Company, plaintiff , pald $13,000 in legal fees in November in connection with a successful infringement sutt on its patent 6. The Johnson Company traded its old equipment for new equipment. The new equipment has a fair value of $10,300. The old equipment had an original cost of $7.900 and a book value of $3.300 at the time of the trade. Johnson also paid cash of $8,200 as part of the trade. The exchange has commercial substance. Required: Prepare journal entries to record each of the above transactions. Complete this question by entering your answers in the tabs below. Transactions Transaction 8 Prepare joumal entry to record the above transaction 6. (If no entry is required for la transaction event select "No journal entry required in the first account field, Journal entry worksheet The Johnson Company traded its old equipment for new equipment. The new equipment has a fair value of $10.300. The old equipment had an original cost of 57.900 and a book value of 53,300 at the time of the trade. Johnson also paid cash ose 200 as part of the trade. The exchange has commercial General Journal Debit Credit - Required information Research Cose 10-2 (Static) FASB codification; locate and extract relevant Information and clte authoritative support for a financial reporting Issue; restoration coste; attet retirement obligation (L010- 1) Your client, Hazelton Mining, recently entered into an agreement to obtain the rights to operate a coal mine in West Virginia for $15 million Hazelton Incurred development costs of $6 million in preparing the mine for extraction, which began on July 1, 2021. The contract requires Hazelton to restore the land and surrounding area to its original condition after extraction is complete in three years. The company controller, Alice Cushing, is not sure how to account for the restoration dosts and has asked your advice. Alice is aware of an accounting standard addressing this issue, but is not sure of its provisions. She has narrowed down the possible cash outflows for the restoration costs to four possibilities. Cash Out+low 53 million million 5 million llion Probability 2ex 3ex 257 Alice also inform you that the company's credit-adjusted risk-free interest rate is 192 Before responding to Alice, you need to research the issue. Research Cese 10-2 (Static) Part 1 and 2 Required: 1 Access the FASE Accounting Standards Codification at the FASB website wwwfasolare) Determine the specific Codification citation for each of the following, based on the format Indicated: (a) accounting for asset retirement obligations XXX-XX. (b) recognition Citteria related to asset retirement obligations (XXX-XX-XX). (c) the requirement to recognize the fair value of the asset retirement obligation as a liability XXX-XX-XX-X). and (d) how to treat the capitalized cost of the asset retirement obligation for the related tangible long-lived asset XXX-XX-XX-X). 2 Determine the capitalized cost of the coal mine. (FV of S1. PV of $1. FVALO.FIVA VADS and PVD of $3 (Use appropriate factoris) from the tables provided. Enter your answer in Whole dollars. Topic Subtopic Section Paragraph 2 Requiredioria do Research Case 10-2 (Static) FASB codification: locate and extract relevant Information and cite authoritative support for a financial reporting issue restoration costs: asset retirement obligation [LO 10- 1) Your Cilent, Hazelton Mining, recently entered into an agreement to obtain the rights to operate a coal mine in West Virginia for $15 million. Hazelton Incurred development costs of $6 million in preparing the mine for extraction, which began on July 1, 2021. The contract requires Hazelton to restore the land and surrounding area to its original condition after extraction is complete in three years. The company controller. Allce Cushing, is not sure how to account for the restoration costs and has asked your advice. Alice is aware of an accounting standard addressing this issue, but is not sure of its provisions. She nas narrowed down the possible cash outflows for the restoration costs to four possibile Cash Outflow $ 3 million 4 million 5 million 6 million Probability 20% 30% 25% 25%, Allce also inform you that the company's credit-adjusted risk-free Interest rate is 19. Before responding to Allce, you need to research the issue. Research Case 10-2 (Statlc) Part 3 3. BD summary journal entry to record the acquisition costs of the mine. (if no entry is required for a transaction event. select "No journal entry required in the first account ileid. Enter your answer in dollars. Rouna rinat answers to the nearest vihole Dollars Journal entry worksheet Te record the acquisition costs of the mine. General Journal Debit oredit View ournal Required Information Research Case 10-2 (Static) FASB codification; locate and extract relevant information and che authoritative support for a financial reporting Issue; restoration costs: asset retirement obligation (2010- 0 Your client, Hazelton Mining, recently entered into an agreement to obtain the rights to operate a coal mine in West Virginia for $15 million. Hazelton incurred development costs of $6 million in preparing the mine for extraction, which began on July 1, 2021. The contract requires Hazelton to restore the land and surrounding area to its original condition after extraction is complete in three years. The company controller, Alice Cushing, is not sure how to account for the restoration costs and has asked your advice. Alice is aware of an accounting standard addressing this issue, out is not sure of its provisions. She has narrowed down the possible cash outflows for the restoration costs to four possibilities, Probability 20% Asisoinoms you that the company's credit-adjusted risk-free interest rate is 9 Before resoonding to Alice, you ned to research the issue. Research Case 10-2 (Static) Part 4 4. Determine the specific Codification citation for each of the following, based on the format indicated el the calcuation of accretion e sense XXXX-X) and (b) the classification of accretion expense to the income statement XXX-XX-XX-X. How much accretion e sense the company record in its income statement for the 2021 fiscal year related to this transaction? Topic Subtopic Section Paragraph credo expense Required Information Research Case 10-2 (Static) FASB codification; locate and extract relevant information and cite authoritative support for a financial reporting Issue; restoration costs: asset retirement obligation (2010. Your client, Hazelton Mining, recently entered into an agreement to obtain the rights to operate a coal mine in West Virginia for $15 million Hazelton incurred development costs of $6 million in preparing the mine for extraction, which began on July 1, 2021. The contract requires Hazelton to restore the land and surrounding area to its original condition aiter extraction is complete in three years. The company controller, Alice Cushing, is not sure how to account for the restoration costs and has asked your advice. Alice is aware of an accounting standard addressing this issue, but is not sure of its provisions. She has narrowed down the possible cash outflows for the restoration costs to four possibilities. Cash Outflow $3llion allion 5 million million Probability 20% 30% 253 255 Alice also inform you that the company's credit-adjusted risk-free interest rate is 996. Before responding to Alice, you need to research the issue. Research Case 10-2 (Static) Part 5 5. Explain to Alice how Hazeiton would account for the restoration if the restoration costs differed from the recorded liability in three years. By way of explanation, prepare the journal entry to record the payment of the retirement obligation in three years assuming that the actual restoration costs were $4.7 million Required Information Research Case 10-2 (Static) FASB codification; locate and extract relevant Information and clte authoritative support for a financial reporting Issue; restoration costs: asset retirement obligation (L010- Your client, Hazelton Mining, recently entered into an agreement to obtain the rights to operate a coal mine in West Virginia for $15 million Hazelton incurred development costs of $6 million in preparing the mine for extraction, which began on July 1, 2021. The contract requires Hazelton to restore the land and surrounding area to its original condition after extraction is complete in three years, The company controller, Alice Cushing, is not sure how to account for the restoration costs and has asked your advice. Alice is aware of an accounting standard addressing this issue, but is not sure of its provisions. She has narrowed down the possible cash outflows for the restoration costs to four possibilities. Probability 25 Alice also inform you that the company's credit-adjusted risk-free interest rate is 99. Before responding to Alice, you need to research the issue. Research Case 10-2 (Static) Part 6 6. Describe to A ce the necessary disclosure requirements for the obligation. What specific Codification citation contains these disclosure requirements XXX-XX-XX-X)? Topic Subtopic Section Paragraph