GreenEnergy Holdings owned the following unproved property as of the end of 2005.

Significant Leases		Insignificant Leases
Lease M	$500,000	Lease N	$70,000
Lease O	$320,000	Lease P	$40,000
Total	$820,000	Lease Q	$30,000
		Lease R	$25,000
		Total	$165,000

Although no activity took place on Lease M during the year, GreenEnergy decided that Lease M was not impaired because there were still two years left in that lease’s primary term. Two dry holes were drilled on Lease O during the year; but because GreenEnergy intended to drill one more well on Lease O in the coming year, it decided that Lease O was only 55% impaired. With respect to the insignificant leases, past experience indicates that 72% of all unproved properties assessed on a group basis will eventually be abandoned. GreenEnergy’s policy is to provide at year-end an allowance equal to 68% of the gross cost of these properties. The allowance account had a balance of $22,000 at year end. Give the entries to record impairment, prepare the income statement and balance sheet, and adjust the trial balance.