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J & J Enterprises purchased a new piece of equipment for its factory under a...

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Accounting

J & J Enterprises purchased a new piece of equipment for its factory under a new government incentive program. The program was intended to encourage companies to invest in new, innovative technologies. The new piece of equipment purchased by J & J qualified for a government grant of $20,600. The equipment itself cost $147,000, and had an estimated useful life of ten years.

Assuming that J & J uses the cost reduction method, prepare the journal entries to record the purchase of the equipment and the receipt of the government grant.

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Account Titles and Explanation Debit Credit To record the purchase of the equipment.) To record the receipt of the government grant.)

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