Question

On April 13, 2020, Pina Ltd. purchased a small apartment building with eight suites. The building qualified as an investment property under IAS 40. At the time of purchase, six out of the eight suites were rented. Pina paid the following items at the time of its acquisition of the apartment building (all items were paid in cash except for the building itself, for which Pina took out a mortgage):

Purchase price of building		$5,680,000
Legal fees		8,310
Property transfer fees		24,300
Painting of empty apartments		5,900
Advertising for empty apartments		2,300

On April 14 the previous owner of the apartment building paid Pina $12,200 for damage deposits from the existing tenants.

On December 31, 2020, the apartment building had a fair value of $5,880,000. On December 31, 2021, it was determined that the apartment building had a fair value of $5,670,000.

Assuming Pina follows IFRS, prepare the journal entries required to record the above events.

Answer 1

Solubon. $5680,000 8310 Given that perchase price of building I Legal fees Property transfer fees painting of empty apartments Advertising for empty apartments 24,300 5,900 2,300 Investment property = purchase price of building + legal fees + property transfer foes = 5680 000 + 8310 + 24 300 = 5712610 Date Account Tites and Explanation Debit Credit April 13 2020 Investment property 5712610 7300 5900 Advertising expense Repair & maintanance expense cash 12,200 5680,000 Mortgage payable Tenant deposits liability 12,200 40810 Dec 31 Cash Investment property (5886,000 - 5712610) 2020 167390

Gain in value of investment property 167390 200000 Dec 31 2021 LOSS in value of invest ment property Investment property (5670,000 - 5,880 000) 210000