Capital Consultants owns the building it uses; it had an original cost of $710,000 and a net book value of $415,000 as of January 1, 2017. On this date, the building was sold to the Royal Leasing Company for $460,000 and simultaneously leased back to Capital Consultants. The lease has a guaranteed, 4-year term and required payments on December 31 of each year. The payments are $152,000, and the lease allows the property to revert to the lessee at the end of the lease. Capital Consultants could have mortgaged this property under similar terms at an interest rate of 9%. The Royal Leasing Company will pay property taxes of $10,000 per year. These costs are included in the lease payment. Capital Consultants will pay maintenance and operating costs. The building is being depreciated straight line over its remaining 4-year life. Please make sure your final answer(s) are accurate to 2 decimal places. a) Calculate the NPV (net present value) of the lease payments.

c) Prepare the journal entries to record the sale and leaseback. Enter an appropriate description when entering the transactions in the journal. Dates must be entered in the format dd/mmm (ie. January 15 would be 15/Jan).

d) Prepare the lease payment and the lessee's year end adjusting journal entries for 2017. Enter an appropriate description when entering the transactions in the journal. Dates must be entered in the format dd/mmm (ie. January 15 would be 15/Jan).

e) Show how the lease-related amounts are presented on the lessee's balance sheet at the end of 2017.

Balance Sheet
Building under lease
Accumulated depreciation
Deferred gain on sale-leaseback
Current portion of lease obligation
Lease obligation

f) Show how the lease related amounts are presented on the lessee's income statement at the end of 2017.

Depreciation expense
Property tax expense
Interest expense