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Neptune Petroleum owned the following unproved property at 12/31/75: Significant Leases: Lease A: $450,000, Impairment: $230,000 Lease B: $680,000, Impairment: $250,000 Insignificant Leases: Lease C:

Neptune Petroleum owned the following unproved property at 12/31/75:

  • Significant Leases:
     Lease A: $450,000, Impairment: $230,000
     Lease B: $680,000, Impairment: $250,000
  • Insignificant Leases:
     Lease C: $90,000
     Lease D: $75,000
     Lease E: $70,000
     Lease F: $60,000
     Total Cost: $295,000, Total Impairment: $90,000

Requirement:
 Prepare journal entries for 2076, assuming the following events:
 a. Lease A was sold for $460,000.
 b. Lease B was impaired by an additional $20,000.
 c. Proved reserves were found on Lease E and Lease F.

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