Mighty

Mountain Mining paid

$1,017,400

for the right to extract mineral assets from a

500,000-ton

deposit. In addition to the purchase price,

Mighty

also paid a

$900

filing fee, a

$1,700

license fee to the state of Nevada, and

$80,000

for a geological survey of the property. Because

Mighty

purchased the rights to the minerals only, it expects the asset to have a zero residual value. During the first year,

Mighty

removed and sold

60,000

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. (Record debits first, then credits. Select the explanation on the last line of the journal entry table. Check your spelling carefully and do not abbreviate.)

Begin by journalizing (a) the purchase of the minerals (debit Mineral asset). (Do not record payment for any additional costs associated with the minerals. We will do this in entry b.)

Date			Accounts and Explanation	Debit	Credit
a.

Journalize (b) the payment of fees and other costs. (Record a single compound journal entry.)

Date			Accounts and Explanation	Debit	Credit
b.

Journalize (c) the depletion for the first year. (Round depletion per ton to the nearest cent.)

Date			Accounts and Explanation	Debit	Credit
c.