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Prepare journal entries to the record the change

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Reference no: EM132993021

Question - PART A - Mask It UpLimited owned and leased out a building in Clean Road, Hygiene surburb and correctly classified this as an investment property on the 31 December 2019. As a result of the worldwide pandemic and resultant downturn in economic conditions, tenants were forced to close and move out. On the 30 June 2020 Mask It UpLimited decided to move into their building. The fair value of the building was R10000000 on the 31 December 2019. On the 30 June 2020, the building had a fair value of R10500000 and a remaining useful life of 10 years.

Required - Prepare journal entries to the record the change in use above.

PART B - In 2020, Mask It Up Limited spent the following amounts on another of its investment properties, a building located in the Freemask province. The tenants of the building are a motor spares shop, a beauty spaanda grocery store.-The roof of the building was slightly damaged in a storm and Mask It UpLimited had to pay R85000 to replace it. A section of the roof, with a carrying amount of R15 000, was scrapped.-Rates assessment for 2020 amounted to R12500.

Required - Record the above transactions as journal entries for Mask It UpLimited?

Reference no: EM132993021

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