Chapter 18 Leases 1305 A18-17 Sale and Leaseback: tral Purchasing Ltd. (CPL) owns the building it uses; it had an original cost of $825,000 and a net book value 50,000 as of 1 January 20X2. On this date, the building was sold to a real estate investment trust (REIT) for $500,000, which also was the building's fair value, and simultaneously leased back to CPL of $2 The lease has a guaranteed, 12-year term and required payments on 31 December of each year. The payments are $76,500, and the lease allows the property to revert to the lessee at the end of the lease. CPL could have mortgaged this property under similar terms at an interest rate of 9%. The REIT will pay property taxes estimated tobe $16,200 per year. These costs are included in the lease payment. CPL will pay maintenance and operating costs The bu ilding is being depreciated straight-line, with an estimated remaining life of 16 years. Required: 1. Prepare entries to record the sale and leaseback of the building. 2. Prepare year-end adjusting entries for 20X2. 9. how how all amounts related to the sale and leaseback will be presented on the statement of financial position and statement of comprehensive income in 20X2. Solution A18- 18 Sale and Leaseback: ns. To raise sufficient Porteo