Benenson Company bought some equipment on a contract entailing a $200,000 cash down payment and an $800,000 lump sum to be paid at the end of 4 years. The same equipment can be purchased for $788,000 cash.
1. Prepare the journal entry for the acquisition of the equipment.
2. Prepare journal entries at the end of each of the first 2 years. Ignore entries for depreciation.
Please help along with explanation.