Problem 1 On December 31, 20×0, an entity purchased a factory at a cost of $10,000,000. The useful l

Problem 1 On December 31, 20x0, an entity purchased a factory at a cost of $10,000,000. The useful life of the factory will b

Problem 1 On December 31, 20×0, an entity purchased a factory at a cost of $10,000,000. The useful life of the factory will be 30 years at which time the site will have to be restored at an estimated cost of $6,000,000. The straight-line method of amortization is used and the relevant discount rate is 4%. Required – a) b) Prepare all journal entries for the years ended December 31, 20×0, 20×1 and 20×2 for the above transaction. During 20×18, the estimate of restoration costs changes to $8,000,000 and the discount rate changes to 4.5%. Write the journal entries for 20×18. During 20×26, the estimate of restoration costs changes to $1,000,000 and the discount rate changes to 5%. Write the journal entries for 20×26.

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