On 1 July 2023, your company acquired a machine for $72,000 on credit and decided to depreciate it for 30 years with no residual amount. The credit was taken from a local bank that charges 2.5% per annum with payments every year on 30 June.

Assume that the fair values of this asset were:

Date	Fair Value
1/7/2023	$75,000
30/11/2023	$70,000
30/6/2024	$60,000

QUESTION 1 (2 MARKS)

Using the cost model, prepare the relevant journal entries from the date of acquisition to 30 June 2024.

QUESTION 2 (2 MARKS)

Using the revaluation model, prepare the relevant journal entries from the date of acquisition to 30 June 2024.

QUESTION 3 (3 MARKS)

Explain your process to decide on these specific journal entries in Question 2. You must support your arguments by referring to the Australian accounting regulation (standards, conceptual framework, etc.). (3 marks)