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What next journal entry required to record the revaluation

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Reference no: EM132858874

On 30 June 2019, Grove Ltd adopted the revaluation model to measure equipment. Due to the revaluation carried out on 30 June 2019, Grove Ltd recognised a gain on revaluation of $30,000 for the one item of equipment listed in this class.

After recording depreciation expense on equipment for the year ended 30 June 2020, and writing the equipment down to its carrying amount of $325,000, Grove Ltd obtained the fair value of $285,000 as at 30 June 2020 for the equipment.

Question 1: The next journal entry required to record the revaluation for equipment on 30 June 2020 is:

Select one:

a. DR Equipment 40,000 CR Gain on revaluation (OCI) 30,000 CR Loss on revaluation (P/L) 10,000

b. DR Loss on revaluation (OCI) 30,000 DR Loss on revaluation (P/L) 10,000 CR Equipment 40,000

c. DR Loss on revaluation (P/L) 40,000 CR Equipment 40,000

d. DR Gain on revaluation (OCI) 30,000 CR Equipment 30,000

Reference no: EM132858874

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