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Bruce Networks Ltd$.($BNL$)$ has a $10-$year renewable lease contract with Open Ltd$.($OL$),$ the owner of a tall building in a major city. BNL is permitted to erect a transmission tower on the top of the building. BNL$$s contract with OL requires BNL to dismantle the tower if and when BNL discontinues its use. BNL expects to use the tower for only $10$ years due to the rapid advance in transmission technology that is likely to render the tower obsolete in $10$ years. The lease payments to OL are $$410,000$ per year.

BNL constructed the tower at the beginning of $20$X$6$ at a cost of $$4,879,000.$ BNL estimates that dismantling and removal of the tower will cost $$430,000.$ The pre$-$tax interest rate that reflects risk is $6\%.$ BNL plans to use straight$-$line depreciation; the company$$s policy is to take a full year$$s depreciation in the year of acquisition but none in the year of disposal.

$($PV of $$1,$ PVA of $$1,$ and PVAD of $$1.)($Use appropriate factor$($s$)$ from the tables provided.$)$

Required:

$1.$ Prepare the journal entry to record construction of the tower and the decommissioning cost obligation. $($If no entry is required for a transaction$/$event$,$ select $"$No journal entry required" in the first account field. Round time value factor to $5$ decimal places and final answer to the nearest whole dollar amount.$)$

$2.$ Prepare the necessary adjusting entries pertaining to the tower and the decommissioning cost obligation for each of the years ending $31$ December $20$X$6$ and $20$X$7.$ Assume that there is no change in the estimated cost of the tower$$s removal. $($If no entry is required for a transaction$/$event$,$ select $"$No journal entry required" in the first account field. Round time value factor to $5$ decimal places and final answer to the nearest whole dollar amount.$)$

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