Fundamentals of Oil & Gas Accounting 5th Edition by Rebecca Gallun, Charlotte Wright

Exercise 11

Gusher Petroleum obtained a lease on March 1, 2015. Being short of funds, Gusher
Petroleum did not begin drilling operations during the first year of the primary term
and on March 1, 2016, made a delay rental payment of $8,000. On May 12, 2016,
the company paid a bottom-hole contribution of $30,000. The information obtained
from this well was so encouraging that Gusher Petroleum decided to begin drilling
operations. However, there were some title problems, and drilling was delayed. Legal
costs incurred for title defense were $50,000. Give the entries.