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On 30 June 2016, Santonada Bhd purchased a patent for RM1,200,000. The expected useful life of the patent is 10-year with no residual value. Santonada

On 30 June 2016, Santonada Bhd purchased a patent for RM1,200,000. The expected useful life of the patent is 10-year with no residual value. Santonada Bhd uses the straight line amortization method for all intangible assets. On 31 December 2017, Santonada Bhd chooses to revalue the patent. There is an active market for this particular patent and its fair value on 31 December 2017 is RM1,180,000.

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Explain briefly the accounting treatment for the year ended 31 December 2017 in each of the above situations. Justify your answer with appropriate journal entries.

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