Central Purchasing Ltd. (CPL) owns the building it uses; it had an original cost of $8,456,000 and accumulated depreciation of $2,536,800 as of 1 January 20X2. On this date, the building (but not the land) was sold to a real estate investment trust (REIT) for $7,956,000, 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 $706,000 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 9%. 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 1 Record the lease for the building under a sale and leaseback. Note: Enter debits before credits. Debit Credit General Journal Transaction 1 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 X 1 Record the Interest expense for the period. 2 Record the lease payable for the period. 3 Record the Depreciation expense for right-of-use asset. Credit