In 2005 Leasy Co sells and leases back a manufacturing asset by way of a lease. The transfer does qualify as a sale in accordance with IFRS 15. The sale proceeds were in excess of fair value and exceeded carrying amount of the asset. Which of the following statements is true?

1/The sale proceeds are recognized as a financial liability

2/The excess of sale proceeds over fair value are recognized as a financial liability

3/right of use asset is recognized

4/The asset is derecognized and a gain or loss on disposal arises.