During 2018, Aggie Petroleum made the following transactions relating to testwell contributions:

a. Contracted with Garth Energy Corporation, agreeing to pay $80,000 if a well was drilled on Garth’s lease to a depth of 20,000 feet.

b. Contracted to pay Varsity Oil Company $65,000 if a well being drilled on Varsity’s property was dry.

c. Agreed to pay Richards Oil Company $110,000 if a well being drilled reached a depth of 9,000 feet.

Results from the above transactions were the following:

a. Because of mechanical difficulty, the Garth well was abandoned at 9,500 feet.

b. The Varsity well was dry.

c. The Richards well was completed as a producer at 12,000 feet.

REQUIRED: Prepare entries for the above transactions, assuming Aggie Petroleum fulfilled its contractual obligations.