Groundhog Petroleum had the following transactions in 2022 concerning test-well contributions:
a.Contracted with Parsons Energy Corporation, agreeing to pay $50,000 if a well was drilled on Parsons lease to a depth of 10,000 feet.
b.Contracted to pay Proton Oil Company $40,000 if a well being drilled on Protons property was dry.
c.Agreed to pay Gaspar Oil Company $100,000 if a well being drilled reached a depth of 7,500 feet.
Results from the above transactions were the following:
a.Because of mechanical difficulties, the Parsons well was abandoned at 9,500 feet
b.The Proton well was dry
c.The Gaspar well was completed as a producer at 12,000 feet.
Prepare entries for the above transactions, assuming Groundhog Petroleum fulfilled its contractual obligations.
