Sweet 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 Sweet qualified for a government grant of $20,400. The equipment itself cost $149,000, and had an estimated useful life of ten years.

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