On January 1, 2020, Zulu Co. sells and immediately leases back a building from X-Ray Inc. The building has a net book value of $30,000,000 ($80,000,000 cost $50,000,000 accumulated depreciation) and a fair value of $50,000,000. The selling price is equal to the fair value. The remaining useful life is 13 years, the lease term is 10 years, and the estimated residual value of the building at the end of the lease term is $10,000,000. This value is not guaranteed. The stipulated fixed payment of $5,297,000 per year, first due on December 31, 2020, represents market rents. The rate implied in the lease is 3.9%, which is the market interest rate for the risk level associated with the lease, and this rate is known by the seller-lessee.

At the end of the lease term, X-Ray Inc., the buyer-lessor, has the option of requiring Zulu to repurchase the building for $10,000,000.

Required:

Prepare all journal entries for 2020 for the seller-lessee (Zulu Co.) and the buyer-lessor (X-ray Inc.) pertaining to the sales-leaseback agreement assuming both follow IFRS.