***Please show explanation***

Lynch Oil, Inc. has an account titled Oil and Gas Properties. Lynch paid $6,800,000 for oil reserves holding an estimated 200,000 barrels of oil. Assume the company paid $530,000 for additional geological tests of the property and $420,000 to prepare for drilling. During the first year, Lynch removed and sold 60,000 barrels of oil. Record all of Lynch's transactions, including depletion for the first year. (Record debits first, then credits. Select the explanation on the last line of the journal entry table.) Lynch paid $6,800,000 for oil reserves holding an estimated 200,000 barrels of oil. Record the payment for the oil reserves. Do not record payment for any additional costs associated with the oil reserves (geological testing and/or drilling). We will do this in the following entry. Date Accounts and Explanation Debit Credit Assume the company paid $530,000 for additional geological tests of the property and $420,000 to prepare for drilling. Record the payment for additional geological tests of the property and for preparing the property for drilling. (Record a single compound journal entry.) Date Accounts and Explanation Debit Credit During the first year, Lynch removed and sold 60,000 barrels of oil. Record the depletion expense for the first year. (Assume no residual value. Round interim calculations to the nearest cent and your final answers to the nearest whole dollar.) Date Accounts and Explanation Debit Credit