Bay Ltd is completing its financial statements for the year ended 30 June 2021. In undertaking the accounting work, it becomes apparent that an item of plant that was thought to be on hand at the end of the previous financial year had actually been destroyed in a bushfire on 25 June 2020. The machinery had a cost of $200,000 and accumulated depreciation of $24,000.

Required:

Provide the accounting entries to account for the discovery of this prior period error in accordance with AASB 108 Accounting Policies, Changes in Accounting Estimates and Errors. Ignore the tax effect and assume that the value of the plant is material to Bay Ltd. (narrations are not required).