Assume that the asset revaluation surplus for the buildings was prepared based on a class-by-class basis rather than on an individual asset basis as required by IAS 16. Prepare the journal entries required for 2017 and 2018 that relate to the buildings. (Ignore the machinery accounts since they are accounted for using the cost model.)(Credit account titles are automatically indented when the amount is entered.Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Record the amounts for Building #1 and #2 and for Machinery seperately. Do not combine these amounts. Round answers to 0 decimal places, e.g. 5,275.)

Problem 10-10 (Part Level Submission)

On July 1, 2017, Concord Ltd., a publicly listed company, acquired assets from Riverbed Ltd. On the transaction date, a reliable, independent valuator assessed the fair values of these assets as follows:

Manufacturing plant (building #1)$399,990Storage warehouse (building #2)209,880Machinery (in building #1)74,530Machinery (in building #2)44,550

The buildings are owned by the company, and the land that the buildings are situated on is owned by the local municipality and is provided free of charge to the owner of the buildings as a stimulus to encourage local employment.

In exchange for the acquisition of these assets, Lucas issued 145,600 common shares. Concord shares are thinly traded, and in the most recent sale of Concord's shares on the Toronto Stock Exchange, 970 shares were sold for $5 per share. At the time of acquisition, both buildings were considered to have an expected remaining useful life of 10 years, the machinery in building #1 was expected to have a remaining useful life of 3 years, and the machinery in building #2 was expected to have a useful life of 10 years. Concord uses straight-line depreciation with no residual values.

At December 31, 2017, Concord fiscal year end, Concord recorded the correct depreciation amounts for the six months that the assets were in use. An independent appraisal concluded that the assets had the following fair values:

Manufacturing plant (building #1)$386,620Storage warehouse (building #2)177,750

At December 31, 2018, Concord once again retained an independent appraiser and determined that the fair value of the assets was:

Manufacturing plant (building #1)$339,630Storage warehouse (building #2)159,940