Warren Energy Company, a successful efforts company, owns an individually significant lease, with a cost of $400,000.

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Warren Energy Company, a successful efforts company, owns an individually significant lease, with a cost of $400,000. On December 31, 2019, the lease is not considered impaired. However, prior to completion of the financial statements, a well on adjacent property is abandoned as a dry hole, and the lease is now considered to be 30% impaired.

REQUIRED: Prepare any necessary adjusting entry.

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