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.