ABC Inc. (ABC) purchases a piece of land for the purpose of developing a gold mine. ABC is legally required to remove all structures and convert the mine site to a wildlife sanctuary at the end of its estimated 12-year useful life, and at the

discount rate to use should be 5.5%. ABC estimates that it will have to spend $11,000,000 to decommission the site and reclaim the land when operations cease. ABC uses straight-line depreciation. The company follows IFRS.

Required: Prepare the journal entries to recognize this site restoration cost the company would record upon initial acquisition and subsequently for the first year.

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