Reference no: EM132497083
Mongolia Inc. owns equipment that it purchased on January 1, 2021, for $ 4,000,000 million.
The following additional information is available:
Dec. 31, 2021 - Book value (after recording 2021 depreciation): $ 3,600,000
Dec. 31, 2021 - Fair value: $ 4,100,000
The company uses the revaluation model (asset adjustment method) to account for its property, plant, and equipment.
Required:
Question 1: Assuming the entry for the current year's depreciation has already been recorded, prepare the compound entry to adjust the asset's carrying amount to fair value.