A&B please!

7. Reed Energy has an unproved lease for which it paid $160,000. The property was individually significant, and individual impairment of $40,000 had been assessed. Reed conveys 60% of its working interest in this property to Milo Energy in exchange for $25,000. a. (5 pts) Assume Reed prefers direct loss recognition when possible but will separately assess/adjust additional impairments at a later date. Prepare the journal entry to record the conveyance. b. (5 pts) Assume Reed prefers indirect loss recognition and will separately assess/adjust impairments at a later date. Prepare the journal entry to record the conveyance. 7. Reed Energy has an unproved lease for which it paid $160,000. The property was individually significant, and individual impairment of $40,000 had been assessed. Reed conveys 60% of its working interest in this property to Milo Energy in exchange for $25,000. a. (5 pts) Assume Reed prefers direct loss recognition when possible but will separately assess/adjust additional impairments at a later date. Prepare the journal entry to record the conveyance. b. (5 pts) Assume Reed prefers indirect loss recognition and will separately assess/adjust impairments at a later date. Prepare the journal entry to record the conveyance