QUESTION 1 Mountain Oil Corporation was interested in a large tract of land in Western Montana for its new onshore E\&P activities. On January 2021, the company began its exploration activities on that lease. The following are the costs incurred by the company for non-drilling exploration activities, in particular. 1. Mountain Oil Corp. obtained shooting right to 10,000 acres for $3.50 per acre. 2. Mountain paid geological firm $500,000 to conduct a reconnaissance survey on the area. 3. As a result of this broad study, Mountain acquired 1,800 acre lease and immediately commissioned same geological firm to conduct detailed G&G studies on the lease at a cost. of $508,000. This lease has a delay rental clause requiring a payment of $2.50 per acre if drilling was not commenced by the end of each full year during the primary lease period. 4. Mountain obtained seismic equipment on April 2021 at a cost of $160,000. The equipment has an estimated useful life of 8 years with a salvage value of $20,000. Mountain also incurred $35,000 for maintenance and operation of the equipment. 5. In 2021, Mountain is agreed to conduct G\&G studies with a cost of $80,000 on a lease owned by Clearance Energy Company in exchange for an interest in the property if proved reserve are found. Should the proved reserves be not found, Mountain will be reimbursed for costs incurred. The result of G\&G studies indicated proves reserves are not found. 6. During 2021, Mountain had to pay $5,200 in ad valorem taxes and $55,000 for title defense in connection with the property. 7. By end of 2021, Mountain had not yet begun any drilling efforts. 8. Early in 2022, another E\&P company began drilling a well nearby Mountain's lease. Mountain entered into a bottomhole contribution agreement with that company in order to obtain G&G information from well. It requiring a payment of $48,000 when contract depth of 12,000 feet was reached. After two months of drilling, the well was found dry at 12,500 feet. REQUIRED: Prepare the journal entries to record the above transactions incurred by Mountain Oil Corporation