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:
Accumulated Amortization—Leased Equipment
Obligations under Capital Leases
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.