January 2015, Moro Company sells a piece of land to Lopez On 1 RM6,000,000, and immediately leases the land back. The following into to this transaction: e term of the non-cancelable lease is 20 years an . Th Company at the end of the lease term . The land has a cost basis of R5,040,000 to Moro Company . The lease agreement calls for equal rental payments of RM611,112 at the en d of each vear . The land has a fair market value of RM6,000,000 on 1 January 2015 The implicit rate of the lease is 8%. Moro Company pays all executory costs in relation to the lease which totals RM255,000 in 2015. . Collectibility of the rentals is reasonably predictable, and there are no important uncertainties surrounding the costs yet to be incurred by the lessor. Required: (a) Prepare the journal entries for the entire year 2015 in the books of Moro Company to reflect the above sale and lease transactions (include a partial amortization schedule) (b) Prepare the journal entries for the entire year 2015 in the books of Lopez Corporation to reflect the above purchase and lease transactions CHAPTER 7 | Leases 269 8 On 1 January 2015, Moro C d to Lopez Corporation for RM6,000,000, and immediately leases the land back. The following information relates to this transaction ompany sells a piece of lan . The term of the non-cancelable lease is 20 years and the title transfers to Moro Company at the end of the lease term. The land has a cost basis of RM5,040,000 to Moro Company. . The lease agreement calls for equal rental payments of RM611,112 at the end of each year . The land has a fair market value of RM6,000,000 on 1 January 2015 The implicit rate of the lease is 8%. Moro Company pays all executory costs in relation to the lease which totals RM255,000 in 2015. . . Collectibility of the rentals is reasonably predictable, and there are no important uncertainties surrounding the costs yet to be incurred by the lessor. Required: (a) Prepare the journal entries for the entire year 2015 in the books of Moro Company to reflect the above sale and lease transactions (include a partial amortization schedule). (b) Prepare the journal entries for the entire year 2015 in the books of Lopez Corporation to reflect the above purchase and lease transactions