7 and 8

Exercise 7 - Investment property transfers On January 1, 2020, Hedchala Corp. owns a mall held for rentals to small businesses. The mall is being carried at its current fair value of P35,000,000. The mall has a remaining useful life of 20 years with no residual value. Required: Prepare the journal entries in 2020 under the following assumptions. 1. During the year the board of directors decided to cease operating the mall and hold it for immediate sale. 2. During the year the board of directors decided to cease operating the mall and commenced owner-occupation Exercise 8 - Investment property transfers On January 1, 2020, Dubious Corp. owns a building developed with a view to sale. The commercial complex has a cost of P25,000,000. The building has been on real property sales listing on different markets for three years now that Dubious is starting to doubt the saleability of the property. In order to minimize the losses that Dubious will incur an operating lease was signed to another party for five years. Dubious will be earning rent from the property from the time of occupation on January 1,2020. The commercial building has a fair value of P23,500,000 and a remaining life of 15 years at that time. Required: Prepare the journal entries to record the transfer of the building to investment property under: 1. Cost Model 2. Fair Value model