ayne Oil Co. began operations during 2019. The following information is as of 12/31/19 and early 2020.
Expense lifting costs as lease operating expense
Transactions, 2019:	Lease A	Lease B	Lease C
*a. Acquisition costs of undeveloped leases (1/8 RI)	$ 60,000	$ 30,000	$ 40,000
*b. G&G costs	60,000	50,000	90,000
*c Drilling costs	200,000	230,000	250,000
d. Drilling results (year end 2019)	Drilling completed	Drilling completed; dry	Drilling not completed
Proved reserves	700,000 bbl	-	-
Proved developed reserves	300,000 bbl	-	-
e. Production	10,000 bbl	-	-
f. Lifting costs	$ 250,000	-	-
g. December 31	Record DD&A	Impaired Lease: 40%	-
Transactions for 2020:
h. Assume on January 2 of the second year (2020) that disaster struck both Lease A and Lease B. Give the entries to record abandonment of Lease A and Lease B. Assume equipment costing $15,000 was salvaged from Lease A. Assume this is not a post-balance sheet event that would give rise to changes in the balance sheet or income statements of the previous years. *May combine entries for different leases
REQUIRED: From the data, (1) prepare journal entries for all three leases, and (2) prepare an income statement for Payne Oil Company for 2019, assuming revenue to the company from oil sales is $1,200,000