Central Purchasing Ltd. (CPL) owns the building it uses; it had an original cost of $8,264,000 and accumulated depreciation of $2,479,200 as of 1 January 20x2. On this date, the building (but not the land) was sold to a real estate investment trust (REIT) for $7,764,000, which also was the building's fair value, and simultaneously leased back to CPL. The lease has a 15-year term and required payments on 31 December of each year. The payments are $674,000 with no transfer of title or purchase option. CPL will pay all of the building's operating and maintenance costs including property taxes and insurance. CPL's incremental borrowing rate is 7%. The building is being depreciated straight-line with a full year's depreciation in the year of acquisition. (PV of $1. PVA of $1, and PVAD of $1.) (Use appropriate factor(s) from the tables provided.) Required: 1. Prepare entries for CPL to record the sale and leaseback of the building. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations.) View transaction list Journal entry worksheet Record the lease for the building under a sale and leaseback. Note: Enter debits before credits. Transaction General Journal Debit Credit 1 Cash 7,764,000 2,479,200 Accumulated depreciation, building Building 8,264,000 2. Prepare year-end adjusting entries for 20x2. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round the intermediate and final answers to the nearest whole dollar amount.) View transaction list View journal entry worksheet X No Transaction General Journal Debit Credit 1 1 429,711 Interest expense Lease liability 429,711 2 2 Lease liability 674,000 Cash 674,000 3 3 409,249 Depreciation expense, right-of-use asset Accumulated depreciation, right-of-use asset 409,249 3-a. Show how all amounts related to the sale and leaseback will be presented on the statement of financial position in 20X2. (Round the intermediate and final answers to the nearest whole dollar amount.) $ 5,729,482 Statement of Financial Position (Partial) Fixed assets: Building as right-of-use asset $ 6,138,731 Less: Accumulated depreciation 409,249 Short-term liabilities: Current portion of long-term lease liability Long-term liabilities: Lease liability 5,894,442 Less: Current portion 261,389 5,633,053 5,633,053 3-b. Show how all amounts related to the sale and leaseback will be presented on the statement of comprehensive income in 20x2. (Round the intermediate and final answers to the nearest whole dollar amount.) Statement of comprehensive income (Partial) Depreciation expense $ 49,306 Interest expense $ 429,711