To raise operating funds, National Distribution Center sold its office building to an insurance company on January 1, 2016, for $870,000 and immediately leased the building back. The operating lease is for the final 10 years of the buildings estimated 50-year useful life. The building has a fair value of $870,000 and a book value of $685,000 (its original cost was $1 million). The rental payments of $170,000 are payable to the insurance company each December 31. The lease has an implicit rate of 9%. Required: 1.&2. Prepare the appropriate entries for National Distribution Center on January 1, and December 31, 2016, to record the sale-leaseback and necessary adjustments..