Motsi plc purchased a property on 1 April 20X7 to use as a distribution warehouse. The cost of the property was 1 000 000 and was paid for in cash. On acquisition the financial director attributed 250 000 to the cost of the land and 750 000 to the cost of the building.

The companys accounting policy is to use the revaluation model for property and to depreciate buildings at 2% per annum on the straight-line method. The residual value of the building is estimated at 150 000. Revaluations are accounted for on the net replacement value method.

Over the next eighteen months, regeneration of the area resulted in property prices increasing and on 31 December 20X8, the property was valued by a professional valuer at 1 200 000, all attributable to the increase in the value of the land.

For some time, the directors of Motsi plc have been considering a very favourable proposal made by Oti plc to rent the property referred above on a long-term basis. They agreed to this at the December 20X8 board meeting and Oti plc will take occupation of the property from 1 January 20X9.

The fair value of the property at 31 December 20X9 was assessed by a professional valuer at 1 300 000.

Required:

Prepare all the journal entries relating to the property for the year ending 31 December 20X9.