Curmudgeon Oil Company owns an individually significant lease with a cost of $980,000. No impairment has been taken on the lease. A well on an adjacent lease however was recently drilled and no economically viable quantities of oil were found (a dry hole). Curmudgeon now considers the lease to be 45% impaired. Record the journal entry for the impairment.

Reference:

Book: Petroleum Accounting - 5e

ACCT-6310.701 Energy Accounting

The University of Texas Permian Basin