Reference no: EM132055236

Question - An entity purchases a building on December 31, 20x2 at a cost of $10,000,000. On December 31, 20x3, they purchase another building at a cost of $6,000,000. The entity opts to use the revaluation model (the gross carrying amount method) for their buildings. Buildings are depreciated on a straight line basis over 40 years with no residual value. Fair value data on each building is as follows:

December 31, 20x4 December 31, 20x6 December 31, 20x8

Building 1 $9,800,000 9,100,000 -

Building 1 $5,900,000 5,400,000 5,300,000

On October 31, 20x7, Building 1 is sold for $8,950,000.

Required -

(a) Prepare all journal entries for 20x2 - 20x7 for Building 1.

(b) Prepare all journal entries for 20x3 - 20x8 for Building 2.