Payment for the geological report

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Reference no: EM13141126

J. Larson & Company purchased the right to extract ore from a mineral deposit by paying $50,000 in cash and  signing a $200,000 promissory note. Larson spent an additional $25,000 cash for a geological report that  estimated the mineral deposit contained 110,000 tons of ore. Larson expects the asset to have a zero residual value when fully depleted. During the first year of operations, 34,000 tons of ore were mined.

Required:

a) Prepare the journal entries to record the purchase of the right to the mineral deposit..

b) The payment for the geological report.

c) The depletion of the mineral deposit for the first year.

Reference no: EM13141126

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