Entry for Purchase by Lessee Cordon Enterprise Company leases many of its assets and capitalizes…

Entry for Purchase by Lessee

Cordon Enterprise Company leases many of its assets and capitalizes most of the leased assets. At December 31, the company had the following balances on its books in relation to a piece of specialized equipment:

Leased Equipment                                                            

$80,000

Accumulated Amortization—Leased Equipment                                       

49,300

Obligations under Capital Leases                                                 

26,000

Amortization has been recorded up to the end of the year, and no accrued interest is involved. At December 31, Cordon decided to purchase the equipment for $32,000 and paid cash to complete the purchase. Give the entry required on Cordon’s books to record the purchase.

 

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