A company pays $896,800 cash to acquire an iron mine on January 1. At that same time, it incurs additional costs of $70,800 cash to access the mine, which is estimated to hold 118,000 tons of iron. The estimated value of the land after the iron is removed is $23,600. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

1. Prepare the January 1 entry to record the cost of the iron mine.

2. Prepare the December 31 year-end adjusting entry if 25,400 tons of iron are mined but only 21,600 tons are sold this first year.

Please explain with calculations.