Huaraz incorporated built a small power plant on the land it owns. Construction was completed on 1 January 2019. The plant will be operating for the next 20 years. At the end of the 20 years, Huaraz will be required to incur an estimated cost of $5 million to restore the land. this is required by government legislation. The interest rate that reflects the risk to Huaraz is 8%.

Required:

Provide the journal entry for the restoration costs on 1 January 2019.

Provide all required adjusting journal entries on 31 December 2019.