Cullumber Holdings Inc., a publicly listed company in Canada, ventured into construction of a mega-shopping mall in Edmonton, which is rated as the largest shopping mall in North America. The companys board of directors, after much market research, decided that instead of selling the shopping mall to a local investor who had approached them several times with excellent offers that he steadily increased during the year of construction, the company would hold this property for the purposes of capital appreciation and earning rental income from mall tenants. Cullumber Holdings retained the services of a real estate company to find and attract many important retailers to rent space in the shopping mall, and within months of completion at the end of 2017, the shopping mall was fully occupied. According to the companys accounting department, the total construction cost of the shopping mall was $52 million. The company used an independent appraiser to determine the malls fair value annually. According to the appraisal, the fair values of the shopping mall at December 31, 2017, and at each subsequent year end were:

2017		$52 million
2018		$61 million
2019		$65 million
2020		$59 million

The independent appraiser felt that the useful life of the shopping mall was 20 years and its residual value was $11 million. Note that the malls rental income and expenses would be the same and thus can be omitted from the analysis for this exercise.

REQUIRED:

1. Prepare the necessary journal entries for 2018, 2019, and 2020 if it decides to treat the shopping mall as an investment property under IAS 40: Use fair value model

Dec 31 2018 Debit:

Credit:

Dec 31 2019 Debit:

Credit:

Dec 31 2020: Debit:

Credit:

2. Prepare the necessary journal entries for 2018, 2019, and 2020 if it decides to treat the shopping mall as an investment property under IAS 40: Use Cost model.

Dec 31 2018: Debit:

Credit:

Dec 31 2019: Debit:

Credit:

Dec 31 2020: Debit:

Credit:

*FYI - There are no more than 2 accounts per entry*