The journal entry required to recognise depreciation on a drilling rig that is being used in the exploration phase of a mining project is:
A) DR $\quad$Depreciation expense - drilling rig$\quad$$\quad$XX
CR $\quad$Accumulated depreciation - drilling rig$\quad$XX
B) DR $\quad$Intangible E&E asset$\quad$$\quad$$\quad$XX
CR $\quad$Accumulated depreciation - drilling rig $\quad$XX
C) DR $\quad$Depreciation expense-drilling rig $\quad$XX
CR $\quad$Intangible E&E asset$\quad$$\quad$$\quad$XX
D) DR $\quad$Intangible E&E asset$\quad$$\quad$$\quad$XX
CR $\quad$Depreciation expense - drilling rig$\quad$XX

Question

Quizplus · Accepted Answer

In the exploration phase, costs are often capitalized as intangible exploration and evaluation (E&E) assets. Depreciation of equipment used in this phase is capitalized to the E&E asset rather than expensed.

The Journal Entry Required to Recognise Depreciation on a Drilling \quad

The Journal Entry Required to Recognise Depreciation on a Drilling $\quad$