To raise operating funds, North American Courier Corporation sold its building on January 1, 2021, to an insurance company for $500,000 and immediately leased the building back. The lease is for a 10-year period ending December 31, 2030, at which time ownership of the building will revert to North American Courier. The building has a carrying amount of $400,000 (original cost $1,000,000). The lease requires North American to make payments of $88,492 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 12%. (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 (a) on January 1, 2021, to record the transaction and (b) on December 31, 2021, to record necessary adjustments. 2. Show how North American's December 31, 2021, balance sheet and income statement would reflect the sale-leaseback. Answer is not complete. Complete this question by entering your answers in the tabs below. Complete this question by entering your answers in the tabs below. Required 1 Required 2. Prepare the appropriate entries for North American (a) on January 1, 2021, to record the transaction and (b) on December 31, 2021, 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.) No Date General Journal Debit Credit 1 500,000 January 01, 2021 Cash Notes payable 500,000 2 December 31, 202 Interest expense 60.000 Notes payable 28,492 Cash 88.492 3 X 41,667 X December 31, 202 Notes payable Accumulated depreciation Interest expense -41,667 X X 41,667 X To raise operating funds, North American Courier Corporation sold its building on January 1, 2021, to an insurance company for $500,000 and immediately leased the building back. The lease is for a 10-year period ending December 31, 2030, at which time ownership of the building will revert to North American Courier. The building has a carrying amount of $400,000 (original cost $1,000,000). The lease requires North American to make payments of $88,492 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 12%. (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 (a) on January 1, 2021, to record the transaction and (b) on December 31, 2021, to record necessary adjustments. 2. Show how North American's December 31, 2021, balance sheet and income statement would reflect the sale-leaseback. Answer is not complete. Complete this question by entering your answers in the tabs below. Complete this question by entering your answers in the tabs below. Required 1 Required 2. Prepare the appropriate entries for North American (a) on January 1, 2021, to record the transaction and (b) on December 31, 2021, 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.) No Date General Journal Debit Credit 1 500,000 January 01, 2021 Cash Notes payable 500,000 2 December 31, 202 Interest expense 60.000 Notes payable 28,492 Cash 88.492 3 X 41,667 X December 31, 202 Notes payable Accumulated depreciation Interest expense -41,667 X X 41,667 X