On 31 March 20X2, Supergrocery Inc., a private company, sold its major distribution facility, with a 30 -year remaining life, to National Leasing Company for \(\$ 9,000,000\) cash. The facility had an original cost of \(\$ 10,400,000\) and accumulated depreciation of \(\$ 3,600,000\) on the date of sale.

Also on 31 March 20X2, Supergrocery signed a 20 -year lease agreement with National Leasing Company, leasing the property back. At the end of the 20 -year lease term, legal title to the facility will be transferred to Supergrocery. Annual payments, beginning on 31 March \(20 X 2\), are \(\$ 875,000\). Maintenance and repair costs are the responsibility of Supergrocery. Supergrocery has an incremental interest rate of \(9 \%\). The company uses straight-line depreciation and has a 31 December year-end. Super grocery records a part-year's depreciation, based on the date of acquisition, whenever it buys finance assets.

Required:
1. Give the \(20 \times 2\) entries that Supergrocery Incorporated would make to record the sale and the lease.
2. Give the entries Supergrocery would make in \(20 \mathrm{X} 3\) and \(20 \mathrm{X} 4\) in relation to this transaction.
3. Show how the statement of financial position and income statement would reflect the transactions at the end of 20X2, 20X3, and 20X4. Do not segregate SFP items between current and non-current items.