On December 31, 20X1, Lane, Inc., sold equipment to Nolte and simultaneously leased it back for 12 years. Pertinent information at this date is as follows:

Sales price (received in cash) ................. $480,000
Carrying amount ..................................... $360,000
Estimated remaining economic life ....... 15 years

Required:

1. At December 31, 20X1, should Lane report a gain from the sale of the equipment?

2. If not, how should it account for the sale and leaseback in 20X1?