Finner Fuels Ltd. has constructed a diesel fuel terminal on property leased from the Provincial Government on a twenty-year lease.Terms of the lease include a requirement that the site be restored to its original condition at the end of that time.Finner has estimated that the cost of restoration will be $8,000,000 and that an appropriate interest rate for discounting this obligation is 6%.The company uses straight-line amortization for all capital assets.

Required:

a. Assume that the terminal was put into operation on January 1, 2020.Provide all journal entries for 2020 related to Finner's site restoration obligation. (6 marks)

b. At the end of the lease term, Finner pays $8,190,000 to restore the site. Provide all journal entry for the settlement of the asset retirement obligation. (2 marks)