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Central Purchasing Ltd . ( CPL ) owns the bullding it uses; it had an original cost of $ 8 , 0 9 6 ,

Central Purchasing Ltd.(CPL) owns the bullding it uses; it had an original cost of $8,096,000 and accumulated depreciation of $2,428,800 as of 1 January 202. On this date, the building (but not the land) was sold to a real estate Investment trust (REIT) for $7,596,000, which also was the bulding'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 $646,000 with no transfer of $ title or purchase option. CPL will pay all of the bullding's operating and maintenance costs including property taxes and insurance. CPL's incremental borrowing rate is 9%. The bullding is being depreclated straight-Iine with a full year's depreciation in the year of acquisition.
(PV of $1, PVA of $1, and PVAD of $1.)(Use approprlate factor(s) from the tables provided.)
Required:
Prepare entries for CPL to record the sale and leaseback of the bullding. (If no entry Is required for a transactlon/event, select "No Journal entry required" In the flrst account fleld. Do not round Intermedlate calculations.)
Journal entry worksheet
1
Record the lease for the building under a sale and leaseback.
Note: Enter debits before credits.
\table[[Transaction,General Journal,Debit,Credit],[1,Cash,7,596,000,],[,Accumulated depreciation, building,2,428,800,],[,,,],[,,,]]
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