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

Exercise 10

Latitude Energy decided to explore some acreage in Texas before acquiring any leases.
Latitude acquired shooting rights only on 15,000 acres owned by Mr. T for $0.10/acre.
Latitude obtained shooting rights coupled with an option to lease on 10,000 acres
owned by Mr. H for $0.25/acre. After completing G&G surveys at a cost of $85,000,
Latitude decided to lease 5,000 acres from Mr. T, paying a bonus of $35/acre. Latitude
also decided to lease 5,000 acres from Mr. H, paying the same bonus of $35/acre.
Latitude's income statement has seen better days, and although it will not help much,
Latitude decides to capitalize every possible cost. Give the entries.