Show a journal entries relating to acquisition of property

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Reference no: EM132584188

Brick Bhd purchased a building as an investment property on 1 January 2017 for RM5 million. The legal cost relating to the purchase of property was RM30,000. The building is expected to have a useful life of 25 years and a scrap value of RM150,000. The building is revalued on 31 December every year. The fair value of the building is determined to be RM6 million and RM7 million at 31 December 2017 and 2018, respectively.

Brick Bhd uses the fair value model to account its investment property. The company also uses straight-line method to depreciate its non-current assets.

Required:

Problem 1: show a journal entries relating to the acquisition of the property and any adjusting entries required at 31 December 2017 and 2018.

Problem 2: Based on FRS 140 Investment Property, state THREE (3) types of properties that cannot be classified as investment property.

Problem 3: According to FRS 140 Investment Properties, define investment properties and state TWO (2) conditions investment property should be recognized as an asset.

Reference no: EM132584188

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