InnovativePetro owned the following unproved property as of the end of 1998.

Significant Leases		Insignificant Leases
Lease X	$400,000	Lease Y	$65,000
Lease Z	$300,000	Lease W	$50,000
Total	$700,000	Lease V	$45,000
		Lease U	$35,000
		Total	$195,000

Although no activity took place on Lease X during the year, InnovativePetro decided that Lease X was not impaired because there were still four years left in that lease’s primary term. Two dry holes were drilled on Lease Z during the year; but because InnovativePetro intended to drill one more well on Lease Z in the coming year, it decided that Lease Z was only 45% 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. InnovativePetro’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 $21,000 at year end. Give the entries to record impairment, prepare the adjusted trial balance, and calculate the current tax expense.