• Linus both owns and leases equipment used on construction jobs. Typically, its equipment lease contracts provide that Linus may return the equipment upon completion of a job or may apply all rentals in full toward purchase of the equipment. About 70 percent of lease rental payments made in the past have been applied to the purchase of equipment. While leased equipment is in use, tents are charged to the account payments made on leased equipment. While leased equipment is in use, rents are charged to the account payments made on leased equipment (except for $ 1 balance) and to jobs on which the equipment has been used. In the event of purchase, the balance in the payments made on leased equipment account is transferred to the machinery and equipment account, and the depreciation and other related accounts are corrected.