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A recent annual report for Celtic Air Lines included the following note:

NOTE $1$: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Maintenance Costs

We record maintenance costs related to our fleet in aircraft maintenance materials and outside repairs. Maintenance costs

are expensed as incurred, except for costs incurred under power$-$by$-$the$-$hour contracts, which are expensed based on

actual hours flown. Modifications that enhance the operating performance or extend the useful lives of airframes or

engines are capitalized and amortized over the remaining estimated useful life of the asset or the remaining lease term,

whichever is shorter.

Assume that Celtic made extensive repairs on an airplane engine, increasing the fuel efficiency and extending the useful

life of the airplane. The existing airplane originally cost $$4,700,000,$ and by the end of last year, it was half depreciated

based on use of the straight$-$line method, a $20-$year estimated useful life, and no residual value. During the current year,

the following transactions related to the airplane were made:

a$.$ Ordinary repairs and maintenance expenditures for the year, $$700,000$ cash.

b$.$ Extensive and major repairs to the airplane's engine, $$2,860,000$ cash. These repairs were completed at the end of the

current year.

c$.$ Recorded depreciation for the current year.

P$8-2$ Part $2$

What was the net book value of the aircraft on December $31$ of the current year?

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