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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 LtdCPL owns the bullding it uses; it had an original cost of $ and accumulated depreciation of $ as of January On this date, the building but not the land was sold to a real estate Investment trust REIT for $ which also was the bulding's fair value, and simultaneously leased back to CPL
The lease has a year term and required payments on December of each year. The payments are $ 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. CPLs incremental borrowing rate is The bullding is being depreclated straightIine with a full year's depreciation in the year of acquisition.
PV of $ PVA of $ and PVAD of $Use approprlate factors 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 transactlonevent select No Journal entry required" In the flrst account fleld. Do not round Intermedlate calculations.
Journal entry worksheet
Record the lease for the building under a sale and leaseback.
Note: Enter debits before credits.
tableTransactionGeneral Journal,Debit,CreditCash,Accumulated depreciation, building,
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