You have recently been hired as controller of Benjamin Enterprises, a manufacturing company. In addition to its manufacturing facility, the company operates an exploration site where it has been successful in discovering oil that is used in its manufacturing division. The company also has a chain of stores that sell the manufacturing products. The previous controller left suddenly due to illness. Your first task is to prepare the liability section of the financial statements for the year ended December 31, 2022. Below are selected issues that you are working to resolve. Benjamin Enterprises reports under international financial reporting standards (IFRS).

Please show all calculations

Benjamin exploration site cost $1,800,000 at the beginning of the year. The site will be operated for 10 years at which time Bull must return the site to its original state. It is estimated that this will cost $750,000 at the end of the sites useful life. Assume that Bull uses private entity GAAP.

Prepare the journal entries for the acquisition of the site and the asset retirement obligation. The effective interest rate is 6%.

Prepare the journal entries for December 31, 2022.