Hein Oil Company, a SE company, owns 100% of the WI in a proved property that has the following capitalized costs:

A 1/8 royalty on the property is owned by Sammy Jones. Hein sells the WI for \($1,200,000\) and retains a PPI of \($300,000\). The PPI is payable from the proceeds from 30% of the WI’s share of production. The fair market value of the entire original WI is $1,500,000.
Prepare the journal entry by Hein to record the above transaction, assuming that payment of the PPI is not reasonably assured.

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Proved Property $240,000 IDC 600,000 Equipment 400,000 Total Accumulated DD&A. 200,000