On January 1, 2023, Aero Corporation and Smith Ltd. agreed to purchase a pipeline together and signed a contract to operate the pipeline together as a joint operation. The pipeline cost $43,000,000 in total, with Aero contributing 42% of the capital, and Smith paying the remainder. The joint operation agreement specified that revenues and expenses were to be split between the two parent companies based on the proportion of capital invested. The two partners hired a management company (Dream On Corporation) to operate the pipeline on their behalf. The pipeline was estimated to have a remaining useful life of 35 years. During 2023, the pipeline generated a total revenue of $4,800,000, which was paid out in cash to each of Aero and Smith. At the end of 2023, Dream On Corporation charged a management fee of $2,980,000 for operating the pipeline.

REQUIRED:

Prepare all the journal entries required to record the joint operation on the books of Aero Corporation. (4 Marks)