Dogan Industries Limited purchased a strip mine for cash on April 1, 2020, at a cost of $5,949,000. Dogan expects to operate the mine for 10 years, at which it is legally required to restore the surrounding area to its original state. It is estimated that it will cost $508,000 to do this at the end of the mines useful life.

The companys year-end is December 31, and Dogan follows IFRS.

Based on the effective interest rate of 5%,

Required

1. Prepare the journal entry to record the purchase of the mine and to record the asset retirement obligation for the mine on April 1, 2020.
2. Prepare any journal entries required for the mine (straight-line depreciation) and the asset retirement obligation on December 31, 2020
3. On April 1, 2030, Dogan paid cash to an environmental firm to restore the mines surrounding area to its original state at a cost of $518,000. Prepare the journal entry for the settlement of the asset retirement.