Buy-N-Buy Bhd (BNB) is an e-business that was established on 1 July 2017 and has recently listed on main board of Bursa Malaysia. The company closes its accounts on 30 June each year and the schedule below is a partial statement of financial position of the company as at the financial year-end 2019.

	RM
Freehold land	3,000,000
Warehouse	2,000,000
Accumulated depreciation - Warehouse	(200,000)
Equipment	350,000
Accumulated depreciation - Equipment	(105,000)

Additional information:

1. BNB decided to construct a new office building on 1 May 2019 and the construction is expected to complete on 31 December 2020. The company obtained a 3-year term loan of RM300,000 with 5% interest rate from Mavi Bank on 1 August 2019 to finance the construction of the office building. The following expenditures were incurred during the construction period:

Date	RM
1 May 2019	100,000
1 June 2019	120,000
30 September 2019	150,000
4 February 2020	50,000
28 June 2020	80,000
12 November 2020	90,000

In addition, BNB has an outstanding loan, 6%, 5-year note payable of RM500,000, dated 1 October 2017.

2. On 1 January 2020, BNB purchased a new equipment at a cost of RM200,000 to replace an old equipment which was purchased when the company was firstly established. The book value of the old equipment on this date was RM56,000. The company chose to dispose the old equipment and netting off the cost of the new equipment against the one-off subsidy of RM50,000 awarded by the government.

3. The land and warehouse were revalued to RM3,500,000 and RM1,580,000 at 30 June 2020.

4. The accounting policies related to the depreciation of the assets are as follows:

• Warehouse 5%
• Equipment 15%

REQUIRED:

(Round your answer to the whole number)

1. Calculate the amount of interest to be capitalised for the financial year 2020 and prepare the related journal entries.

2. Prepare the journal entries to record the replacement and depreciation of the equipment on 1 January 2020.

3. Prepare the journal entries to record revaluation of land and warehouse for the financial year 2020.

4. Briefly discuss the accounting treatments for the following transaction:

1. BNB fits interior partitions into its warehouse to enable the employees to work more effectively and efficiently.