Exercise 1 - Investment property Journal entries On January 1, 2020, Saitama Investment Corp acquired the following investments for cash Land P7,500,000 Building P9,000,000 Saitama spent P400,000 for repainting of the building and minor repair before the building can commence its primary purpose of renting out to tenants. The building has an expected useful life of 10 years An expert provided the following fair values of the building December 31, 2020 P8,000,000 December 31, 2021 P7,500,000 Saitama pad broker's fees of P200,000 for the acquisition of the parcel of land. Clearing costs of P20,000 were incurred in creating an access route for the land and uprooting unwanted shrubs and trees. The land is to be held for capital appreciation The land had the following appraised values: December 31, 2020 P8,500,000 December 31, 2021 P9,500,000 Prepare the journal entries for 2020 & 2021 if Saitama accounts for the properties under: 1. Fair value model 2. Cost model Exercise 2 - Investment property using cost & fair value model. On January 1, 2016, Genos Company owned an investment property which had an original cost of PS, 300,000 and useful life of 40 years. On December 31, 2018, the fair value was P6,000,000 and on December 31, 2019, the fair value was P 5,900,000 Required: 1. Under the fair value model, what is the gain or loss to be presented in the income statement for the year ended December 31, 2019? 2. Under the cost model, what is the expense to be presented in the income statement for the year ended December 31, 2019? Exercise 3 - Investment property transfers. Silver Fang Company, a real estate entity, had a building with a carrying amount of P20,000,000 on December 31, 2019. The building was used as offices of the entity's administrative staff, On December 31, 2019, the entity intended to rent out the building to Independent third parties. The staff will be moved to a new building purchased early in 2019. On December 31, 2019, the original building had a fair value of P35,000,000. On December 31, 2019, the entity also had land that was held sale in the ordinary course of business. The land has a carrying amount of P10,000,000 and fair value of P 15,000,000 on December 31, 2019. On such date, the entity decided to hold the land for capital appreciation. The accounting policy is to carry all investment property at fair value Required: 1. On December 31, 2019, what amount should be recognized in revaluation surplus as a result of transfer of the building to investment property? 2. On December 31, 2019, what amount should be recognized in the income statement as a result of transfer of the land to investment property? 3. Prepare the journal entry to record the transfer to investment property