BluePetro Inc. owned the following unproved property as of the end of 1989.

Significant Leases		Insignificant Leases
Lease A	$510,000	Lease B	$85,000
Lease C	$330,000	Lease D	$50,000
Total	$840,000	Lease E	$45,000
		Lease F	$35,000
		Total	$215,000

Although no activity took place on Lease A during the year, BluePetro decided that Lease A was not impaired because there were still two years left in that lease’s primary term. One dry hole was drilled on Lease C during the year; but because BluePetro intended to drill one more well on Lease C in the coming year, it decided that Lease C was only 55% impaired. With respect to the insignificant leases, past experience indicates that 70% of all unproved properties assessed on a group basis will eventually be abandoned. BluePetro’s policy is to provide at year-end an allowance equal to 72% of the gross cost of these properties. The allowance account had a balance of $26,000 at year end. Give the entries to record impairment, prepare the adjusted trial balance, and calculate the deferred tax liability.