Reference no: EM132761990

Question - Sunset Mountain Mining paid $362,300 for the right to extract mineral assets from a 350,000-ton deposit. In addition to the purchase? price, Sunset also paid a $300 filing fee, a $2,400 license fee to the state of Nevada, and $55,000 for a geological survey of the property. Because Sunset purchased the rights to the minerals only and did not purchase the? land, it expects the asset to have zero residual value. During the first year, Sunset removed and sold 40,000 tons of the minerals. Make journal entries to record (a) purchase of the minerals (debit Minerals), (b) payment of fees and other costs, and (c) depletion for the first year. (Record debits first, then credits. Select the explanation on the last line of the journal entry table.)

Begin by journalizing (a) the purchase of the minerals (debit Mineral asset). (Do not record payment for any additional costs associated with the minerals.