Groundhog Petroleum had the following transactions in 2022 concerning test-well contributions:

Contracted with Parsons Energy Corporation, agreeing to pay $50,000 if a well was drilled on Parson's lease to a depth of 10,000 feet.

Contracted to pay Proton Oil Company $40,000 if a well being drilled on Proton's property was dry.

Agreed to pay Gaspar Oil Company $100,000 if a well being drilled reached a depth of 7,500 feet.

Results from the above transactions were the following:

Because of mechanical difficulties, the Parson's well was abandoned at 9,500 feet

The Proton well was dry

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

Prepare entries for the above transactions, assuming Groundhog Petroleum fulfilled its contractual obligations.

Answer rating: 100% (QA)

4 Accounts Explanations Crasha Parsons Energy Corporation 5x9... View the full answer