Buch Corporation purchased a machine at the beginning of year 1 at a cost of $711,180.

The expected useful life of the machine is 20 years with no residual value. The straight-line method of depreciation is used. At the end of the 3rd year. The machine is revalued upward at $705,500.

Question 1: Calculate the revaluation gain on 31 Dec, Year 3, and prepare appropriate journal entries.

At the end of year 6, the machine is revalued downward by $100,000.

Question 2: Prepare journal entries related to the revaluation on 31 Dec, Year 6.