Required: 1. Prepare the appropriate entries for North American on (a) January 1, 2018, to record the transaction and (b) December 31, 2018, to record necessary adjustments.

Journal Entries for:

1. 01/01/2018 Record the sales-lease back

2. 12/31/2018 Record Cash Payment

3. 12/31/2018 Record Depreciation Expense

Requirement 2 -

Have left on the balance sheet and income statement that which was correct according to the system. I have done this a couple of times and i keep getting the wrong answer. Any help would be great. Thanks!

To raise operating funds, North American Courier Corporation sold its building on January 1, 2018, to an insurance company for $530,600 and immediately leased the building back. The lease is for a 10-year period ending December 31, 2027, at which time ownership of the building will revert to North American Courier. The building has a carrying amount of $450,000 (original cost $1,300,000). The lease requires North American to make payments of $90,105 to the insurance company each December 31. The building had a total original useful life of 30 years with no residual value and is being depreciated on a straight-line basis. The lease has an implicit rate of 11%. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required: 1. Prepare the appropriate entries for North American on (a) January 1, 2018, to record the transaction and (b) December 31, 2018, to record necessary adjustments. 2. Show how North American's December 31, 2018, balance sheet and income statement would reflect the sale-leaseback. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare the appropriate entries for North American on (a) January 1, 2018, to record the transaction and (b) December 31, 2018, to record necessary adjustments. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your intermediate and final answers to nearest whole dollar.) Required 1 Required 2 Show how North American's December 31, 2018, balance sheet and income statement would reflect the sale-leaseback. (Round your intermediate and final answers to nearest whole dollar.) Balance Sheet Assets: Building Less: Accumulated depreciation Liabilities: Current: $ 35,230 Noncurrent: Lease payable $ 463,631 Income Statement Interest expense Depreciation expense