USA Prepaid Equipment never got delivered by vendor

[iluv#]

Hello,

How should the entries booked for this situation:
Last year the equipment was prepaid and it is sitting on Other Liability account (which how we book for prepaid merchandise to vendors).
But we can't get a hold of this International vendor until now, still has not received the equipment and decided to move forward.
I'm not sure to which account should it get moved to, out of the Liability account.
Any helps is appreciated. TIA!

 

[kirby]

Really confused here.
Last year, what accounts were debited and credited for this equipment?

 

[iluv#]

It was Debit to a liability account and credit Cash.
Then when the equipment is received, it would of been Debit Asset, Credit the liability acct.
But in this case, this equipment will never be received.

 

[kirby]

Since the scoundrel vendor has ghosted you, the entry for the amount you paid which is now in a liability acct is:
DR Loss on Theft of Equipment
CR Liability Account

And while we are on the subject:
I suggest a better account to hold the pending receipt of equipment is in an Asset Account, as the equipment is an asset and not a liability.
Maybe an account like Equipment Purchases Clearing Account.

 

[iluv#]

Appreciate your input very much. Thank you!