Peter Oil Co. was obtained shooting rights to 5,000 kilometers for $2.50 per kilometer (G&G cost).Peter Oil Co. paid $500,000 to conduct G&G studies on the area.Based on the results of G&G studeies, Peter Oil Co. acquired a lease on 620 Kilometeres to conduct detailed G&G studies at a cost of $1,500,000.Peter Co. entered into a bottom-hole contribution agreement with another company began drilling a well on a nearby property in order to obtain the G&G information from the well. the depth specified in the agreement was reached and Peter Co. paid $200,000 as per agreement (test-well contribition).Depreciation of the seismic equipement used by Peter Co. was $100,000 for the year and operating costs were $91,000.
You need to record the accounting entries according to US GAAP for the follwoing transactions:
Peter Oil Co. was obtained shooting rights to 5,000 kilometers for $2.50 per kilometer (G&G cost).Peter Oil Co. paid $500,000 to conduct G&G studies on the area.Based on the results of G&G studeies, Peter Oil Co. acquired a lease on 620 Kilometeres to conduct detailed G&G studies at a cost of $1,500,000.Peter Co. entered into a bottom-hole contribution agreement with another company began drilling a well on a nearby property in order to obtain the G&G information from the well. the depth specified in the agreement was reached and Peter Co. paid $200,000 as per agreement (test-well contribition).
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