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C. SKY Bhd paid RM8,000,000 on 1 January 2018 to purchase a building for capital appreciation. The fair value of the building on 31 December
C. SKY Bhd paid RM8,000,000 on 1 January 2018 to purchase a building for capital appreciation. The fair value of the building on 31 December 2018 and 31 December 2019 were RM15,000,000 and RM10,000,000, respectively. On 30 June 2020, SKY Bhd decided to use this building as an administrative office. The remaining useful life of the building on 30 June 2020 is 8 years. The fair value of the building on 30 June 2020 was RM13,000,000. However, due to financial problem, SKY Bhd sold this building on 30 June 2021 for RM14,500,000. SKY Bhd adopted fair value model for investment property and revaluation model for owner occupied property. Straight-line method has been used by SKY Bhd to calculate depreciation for the property, plant and equipment. SKY Bhd closes its account on 31 December every year. REQUIRED: (a) Prepare all journal entries for the years 2018, 2019, 2020 and 2021. (10 Marks) (b) After initial recognition, MFRS 140 Investment Property requires an entity to choose either the cost model or fair value model as its accounting policy. Explain these two models
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