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Question - On January 1, 2022, $1,340,580 for the mineral rights to an area full of gold veins containing an estimated 334,800 ounces of gold was acquired by Vector Enterprises. Also, the company installed equipment at the site costing $895,505 with no expected salvage value. The equipment would allow for the extraction of the gold within 8 years. The company plans to abandon the equipment at the end of its useful life. The company uses the Units of Production method to depreciate all PPE assets. The company began operations on January 26 and extracted and sold 36,692 ounces of gold during the remaining 11 months of the year.
Required - Give the entries to record the December 31, 2022, amortization of the mineral rights and the depreciation of the equipment.
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