Russel Industries has just completed construction of an oil drilling facility at a cost of $$10$ million. The facility has a useful life of $10$ years, is expected to have a $$1$ million residual value, and is depreciated on the straight$-$line basis. The facility is completed at the end of December $2022.$ Under environmental regulations, Russel Industries is required to dismantle and remove the facility at the end of its useful life and bear any cleanup costs, which are inevitable in such operations. The cost to comply with the law is estimated to be $$650,000.$ The appropriate discount rate is $7\%.$ Assume that dismantling and cleanup can be accomplished within the first month after closing the facility.

Required

Record the capitalization of dismantling and cleanup costs.