In July 20X6,Midstream Ltd Entered into a Joint Venture Operation

In July 20X6,Midstream Ltd entered into a joint venture operation with Delta Ltd to explore for minerals in the area of interest KP97.Midstream Ltd contributed $5,000,000 in cash and Delta Ltd contributed specialised drilling equipment with an agreed fair value of $5,000,000.The venturers shared control of the operation.All the assets of the operation were held by the venturers as tenants in common.The estimated useful life of the plant was 5 years.In the accounts of Delta Ltd,this equipment was carried at cost $6,000,000 less accumulated depreciation $3,000,000.For the year ended June 30 20X7,the following financial statements were prepared by the joint venture manager (amounts in thousands) : Balance Sheet as at June 30 20X7
Performance Statement for the Year ended June 30 20X7
At June 30 20X7,the exploration had not yet advanced to the stage where a reliable estimate could be made of the recoverable mineral reserves in KP97.
The journal entry to record the initial investment of Midstream Ltd would be:

A) Debit Investment in Joint Venture $5,000,000 and Credit Cash $5,000,000.
B) Debit Cash $2,500,000, Debit Plant and Equipment $2,500,000 and Credit Cash $5,000,000.
C) Debit Investment in Joint Venture $2,500,000, Debit Plant and Equipment $2,500,000 and Credit Cash $5,000,000.
D) None of the above.