PrimeEnergy Inc. owned the following unproved property as of the end of 2007.

Significant Leases		Insignificant Leases
Lease S	$480,000	Lease T	$55,000
Lease U	$360,000	Lease V	$45,000
Total	$840,000	Lease W	$35,000
		Lease X	$25,000
		Total	$160,000

Although no activity took place on Lease S during the year, PrimeEnergy decided that Lease S was not impaired because there were still three years left in that lease’s primary term. One dry hole was drilled on Lease U during the year; but because PrimeEnergy intended to drill one more well on Lease U in the coming year, it decided that Lease U was only 45% impaired. With respect to the insignificant leases, past experience indicates that 70% of all unproved properties assessed on a group basis will eventually be abandoned. PrimeEnergy’s policy is to provide at year-end an allowance equal to 65% of the gross cost of these properties. The allowance account had a balance of $23,000 at year end. Give the entries to record impairment, prepare the general ledger, and adjust the trial balance.