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Horizon Mountain Mining paid $826700 for the right to extract mineral assets from a 400,000-ton deposit. In addition to the purchase price, Horizon also paid
Horizon Mountain Mining paid $826700 for the right to extract mineral assets from a 400,000-ton deposit. In addition to the purchase price, Horizon also paid a $1,200 filing fee, a $2,100 license fee to the state of Nevada, and $50,000 for a geological survey of the property. Because Horizon purchased the rights to the minerals only and did not purchase the land, it expects the asset to have zero residual value. During the first year, Horizon removed and sold 20,000 tons of the minerals. Make journal entries to record (a) purchase of the minerals (debit Minerals), (b) payment of fees and other costs, and (c) depletion for the first year
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