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Fundamentals of Oil & Gas Accounting 5th Edition by Rebecca Gallun, Charlotte Wright
Edition 5ISBN: 9781630181031Fundamentals of Oil & Gas Accounting 5th Edition by Rebecca Gallun, Charlotte Wright
Edition 5ISBN: 9781630181031 Exercise 2
On January 1, 2018, Gaylene Raupe purchased a 40,000 barrel production payment
interest from Watershed Oil Company for $700,000. The production payment will be
paid out of 1/5 of the working interest owner's share of production from Lease #1003.
The lease is burdened with a 1/7 RI. Gross production from Lease #1003 during 2018
was 28,000 barrels. Gross proved reserves at 12/31/18 were 130,000 barrels.
Give the entries by Gaylene Raupe to record the purchase of the production payment
interest and DD&A expense for 2018.
interest from Watershed Oil Company for $700,000. The production payment will be
paid out of 1/5 of the working interest owner's share of production from Lease #1003.
The lease is burdened with a 1/7 RI. Gross production from Lease #1003 during 2018
was 28,000 barrels. Gross proved reserves at 12/31/18 were 130,000 barrels.
Give the entries by Gaylene Raupe to record the purchase of the production payment
interest and DD&A expense for 2018.
Explanation
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Following table shows interest payment o...
Fundamentals of Oil & Gas Accounting 5th Edition by Rebecca Gallun, Charlotte Wright
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