To Raise Operating Funds, Combs Corporation Sold a Piece of Equipment

To raise operating funds, Combs Corporation sold a piece of equipment on January 1, 2009, to a finance company for $600,000. Combs immediately leased the equipment back for a 10-year period. After that time ownership will transfer to Combs. The equipment has a fair value of $624,000. Its cost and its carrying value were $480,000. Its useful life is 12 years. The lease requires Combs to make payments of $80,000 to the finance company each January 1 beginning at the inception date of the lease. Combs depreciates similar assets on a straight-line basis. The appropriate interest rate is 7%. The present value of an annuity due of $1 for 10 years at 7% is 7.5
Required:
Prepare the journal entries for Combs on January 1, 2009, to record the sale-leaseback and the December 31, 2009, adjusting entries.