Coral Bay Ltd is a mining company and commences operations on 1 January 2023. During 2023, Coral bay Ltd explores two potential areas for mining and incurs and pays for the following costs.

Area Exploration and evaluation costs ($m)

A 20

B 11

Total 31

Other information:

• In 2024 oil is discovered at Site B. Site A is abandoned because economically recoverable reserves were not proven and as such, an impairment loss for site A is incurred. Of the $11 million at Site B, $6 million relates to tangible assets and $5 million erlates to intangible assets. At site A, $13 million of the expenditure related to tangible assets and $7 million related to intangible assets.
• Development costs of $25 million are incurred (not paid) at Site B (to be written off on a production basis) in 2024. The development costs include $16 million in property, plant and equipment (PPE) and $9 million in intangibles. This expenditure will be depreciated and amortised on a production basis.
• Development at Site B concludes at the beginning of 2024, and production commences at Site B at the start of 2025.
• It is estimated that the amount of oil at Site B is 12 million barrels. The current sale price is $40 per barrel.
• In 2025, Coral Bay Ltd extracts 1.4 million barrels at a production cost of $5.3 million and sells 1.3 million barrels on account.

Required:

Prepare the journal entries to take into account the above transactions in accordance withAASB 6 Exploration for and Evaluation of Mineral Resources.Show all necessary calculations under each journal entry.