At the beginning of current year, Judy Company sold a building with remaining useful life of 30 years and immediately leased it back for 5 years. Sale price at below fair value Fair value of building 18,000,000 20,000,000 24,000,000 Annual rental payable at the end of each year 1,000,000 12% Carrying amount of building Implicit interest rate Present value of an ordinary annuity of 1 at 12% for 5 periods 1. What is the initial lease liability? a. 3,600,000 b. 4,000,000 c. 4,800,000 d. 0 2. What the cost of right of use asset? a. 3,000,000 b. 4,320,000 c. 5,760,000 d. 6,720,000 3. What is the loss on right transferred? a. 4,000,000 b. 2,880,000 c. 5,760,000 d. 6,720,000 '3.60 4. What is the interest expense of the seller-lessee for the current year? a. 120,000 b. 576,000 c. 672,000 d. 432,000 5. What is the net annual rent income of the buyer-lessor? a. 400,000 b. 200,000 c. 300,000 d. 100,000