On January 1, 2020, Sunland Ltd., which uses ASPE, sold a truck to Coronado Finance Corp. for $65,000 and immediately leased it back. The truck was carried on Sunlands books at $50,000, net of $24,500 of accumulated depreciation. The term of the lease is five years, and title transfers to Sunland at lease end. The lease requires five equal rental payments of $16,280, with each payment made at year end. The appropriate rate of interest is 8%, and the truck has a useful life of five years with no salvage value. Click here to view the factor table PRESENT VALUE OF 1.

Click here to view the factor table PRESENT VALUE OF AN ANNUITY OF 1.

Prepare Sunlands 2020 journal entries including any year-end adjusting entries at December 31, 2020.

1. To record sale of vehicle.

2. To record inception of lease.

3. To record depreciation expense.

4. To record amortization of deferred profit.

5. To record lease payment.