In the first year of business, MagicLand Pty Ltd purchased land for $5 million. In the second year, a reputable, independent property valuers report shows that the value of the land is estimated at $4 million. In the third year, the value of the land is estimated at $6 million. At the beginning of the fourth year, MagicLand Pty Ltd sold the land at $7 million and received cash in full. Assume no tax.

Required:

(a) Assume that MagicLand Pty Ltd adopts the revaluation method for land, and revaluation was applied both in the second and the third year. With respect to the land, write the journal entries for the following transaction or event.

Revaluation of land in the second year of business:

Revaluation of land in the third year of business:

Sale of land in the fourth year of business:

Can you explain how to do the journal entries for this question? Thanks