West Mountain Ltd. (WML) is a gold extraction company listed at the Toronto Stock Exchange. On January 1, 2013, WML purchased the rights to use a parcel of land from the province of Nova Scotia. The rights cost $16,000,000 and allowed the company to extract gold for 8 years, i.e., until Dec 31, 2020. WML expects to extract the gold evenly over the contract period. At the end of the contract, WML has to clean up and restore the land. WML estimates this will cost $1,800,000.

WML uses straight-line method for depreciation. WML's fiscal year ends on December 31. An appropriate discount rate is 7%.

Required: (Do not round intermediate numbers and round the final results to the nearest dollar.)

1. Prepare the journal entries to be recorded on January 1, 2013. (6 marks)
2. Prepare the journal entries to be recorded on December 31, 2013. Show the amounts and accounts to be reported on the classified statement of financial position at December 31, 2013. (6 marks)
3. Prepare the journal entries to be recorded on December 31, 2020. Show the amounts and accounts reported on the classified statement of financial position at December 31, 2020. (6 marks)