On January 1, 2022, Tejas Distributors sold a warehouse to Jamble Leasing for $650,000 and

immediately leased it back. The warehouse was carried on Tejas' books at $311,000. The term of the

lease is 20 years, and title transfers to Tejas at lease-end. The lease requires 20 equal rental payments

of $66,204 at the end of each year. The appropriate rate of interest is 8%, and the warehouse has a

useful life of 20 years with no salvage value.

Instructions

Prepare Tejas'2022 journal entries.