Jackpot Mining Company operates a copper mine in central Montana. The company paid $1,400,000 in 2016 for the mining site and spent an additional $680,000 to prepare the mine for extraction of the copper. After the copper is extracted in approximately 4 years, the company is required to restore the land to its original condition, including repaving of roads and replacing a greenbelt. The company has provided the following three cash flow possibilities for the restoration costs: (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.):

	Cash Outflow			Probability
1	$	380,000			25	%
2		480,000			40	%
3		680,000			35	%

To aid extraction, Jackpot purchased some new equipment on July 1, 2016, for $200,000. After the copper is removed from this mine, the equipment will be sold. The credit-adjusted, risk-free rate of interest is 12%.

Required:

1.

Determine the cost of the copper mine.

2.	Prepare the journal entries to record the acquisition costs of the mine and the purchase of equipment.