Structure Oil Company made the following transactions in 2021:

a. During the months of January through March, minimum royalty payments of

$500/month were paid. The minimum royalty payments are recoverable from future royalty payments.

b. Production was sold in April 2021, and the royalty payable in April is $700.

c. The royalty payment in May is $900.

d. The well quit producing in June, and the lease was abandoned.

REQUIRED:

1. Prepare entries for the above transactions.

2. Prepare entries assuming the royalty payments are not recoverable.