On January 1, 2022, John Williams purchased an 8,000-barrel production payment interest from Watershed Oil Company for $800,000. The production payment will be paid out of 1/5 of the working interest owner’s share of production from Lease #1003. The lease is burdened with a 1/8 RI. Gross production from Lease #1003 during 2022 was 24,000 barrels. Gross proved reserves at 12/31/22 were 130,000 barrels.

REQUIRED: Give the entries by John Williams to record the purchase of the production payment interest and DD&A expense for 2022.