Chelsea sold a building for its fair value of GH$5$ million to a finance company on $30$ November $2021$ when its carrying amount was GH$3\mathrm{.}5$ million. The building was leased back from the finance company for a period of $5$ years. The remaining useful life of the building was deemed to be $25$ years so it can be concluded that control of the building has transferred to the finance company. Lease rentals are GH$440,000$ payable annually in arrears. The interest rate implicit in the lease is $7\%.$ The present value of the annual lease payments is GH$1\mathrm{.}8$ million. Chelsea has

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recorded the cash proceeds, derecognised the building, and recorded a profit on disposal of GH$1\mathrm{.}5$ million in the statement of profit or loss. No other accounting entries have been posted.

Required: Discuss the correct accounting treatment of the above transactions in the financial statements of Chelsea at $30$ November $2021.$ Prepare extracts from the financial statement on $31$ March $2022.$