Sanchez Company (seller-lessee) enters into a sale-leaseback to sell its corporate headquarters for $18 million to Harper Bank. The carrying value of the headquarters at the date of sale is $14 million. Sanchez then leases back the headquarters in exchange for $180,000 per year in rental payments. The leaseback is considered an operating lease. How should Sanchez account for this sale?

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Sanchez Company (seller-lessee) enters into a sale-leaseback to sell its corporate headquarters for $18 million to Harper Bank. The carrying value of the headquarters at the date of sale is $14 million. Sanchez then leases back the headquarters in exchange for $180,000 per year in rental payments. The leaseback is considered an operating lease. How should Sanchez account for this sale?

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