Fossil Oil Company entered into two test-well contribution agreements as follows:

a. On May 17, 2004, a bottom-hole agreement was obtained requiring a payment of \($45,000\) when the contract depth of 10,000 feet was reached. The contract depth was reached on September 21, 2004, and the required payment was made.

b. On September 30, 2004, a dry-hole test-well contribution was entered into requiring payment of \($50,000\) if the well was dry but no payment if the well was successful.

1) Assume the well is successful.

2) Assume the well is dry.

Prepare necessary entries for the above transactions.