Prepare adjusting journal entries relating to revaluation

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Question - During 20x4, a company purchased Land 1 at a cost of $3,500,000 and Land 2 at a cost of $2,500,000. On July 1, 20x5, the company exchanged 20% of Land 2 for equipment. The company properly recorded these transactions.

The company decided to use the revaluation model for land. The fair value of the two parcels of land at December 31, 20x5 were $3,900,000 for Land 1 and $1,800,000 for Land 2. The unadjusted trial balance as at December 31, 20x5 shows a balance of zero in both the OCI - Revaluation gain on land and the A*OCI - Revaluation gain on land accounts.

Required - Prepare the adjusting journal entries relating to the revaluation of Land 1 and Land 2 at December 31, 20x5.

Reference no: EM132728042

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