Eimraan Oil Company acquired the following three unexplored leases: July 10, 2019 Lease A $550,000 August 18,
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Question:
Eimraan Oil Company acquired the following three unexplored leases:
July 10, 2019 Lease A $550,000
August 18, 2019 Lease B $325,000
October 14, 2019 Lease C $425,000
All leases are classified as individually significant.
a. On December 31, 2019, Lease A is determined to be 65% impairment. Lease B and C are not impaired.
b. On December 31, 2020, Lease A is determined to be impaired a total of 85%, Lease C, 35% and Lease B is not impaired.
c. On December 31, 2021, Lease A is considered to be 100% impaired and abandoned. Lease B is 40% impaired and a well on Lease C found proved reserves.
Required:
Prepare journal entries for all of the above transactions except the initial purchase.
Expert Answer:
The solution is given below Jousnal Entnies Date Account Titlee Debit eredit Kease t... View the full answer
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