Reference no: EM133186970

Question - On 1 January 2016, Chendana Bhd. purchased a property comprising a freehold land and a 30-stores building for RM50 million. The cost of land at the time of purchase was RM10 million. After the acquisition, the building was renovated at a cost of RM5 million. The renovation was completed on 30 June 2016 and 23 floors were rented out to retailers, while seven floors were used to operate its business activities. The estimated useful life of the building is 30 years. On 1 January 2018, the land and building were revalued at RM12 million and RM48 million, respectively. On 1 January 2015 the tenancy of the building with retailers was terminated and Chendana Bhd. has leased out all 21 floors to its subsidiaries and the remaining floors are used as the headquarters. The fair value of the land and building on 1 January 2019 are RM13 million and RM50 million, respectively.

Required -

(a) Discuss the accounting treatment of the land and building from 2016 until 2019.

(b) Show the journal entries to record the above information from 2016 until 2019.