On March $1,2023,$ Jessi Corp. acquired a $10-$unit residential complex for $$1,275,000,$ paid in cash. An independent appraiser determined that $75\%$ of the total purchase price should be allocated to buildings, with the remainder allocated to land. On the date of acquisition, the building$$s estimated useful life was $25$ years, with estimated residual value of $$325,000.$ Jessi estimates that straight$-$line depreciation would best reflect the pattern of benefits it will receive from the building. Fair value of the complex, as assessed by an independent appraiser on each date, is as follows:

Date $$ Fair Value

December $31,2023$ $$1,322,000$

December $31,2024$ $$1,255,000$

December $31,2025$ $$1,223,000$

The complex qualifies as an investment property under IAS $40$ Investment Property. Jessi has a December $31$ year end.

Instructions

a$)$ Prepare the journal entries required for $2023,2024,$ and $2025,$ assuming that Jessi applies the fair value model to all of its investment property.

b$)$ Prepare the journal entries required for $2023,2024,$ and $2025,$ assuming that Jessi applies the cost model to all of its investment property.

c$)$ Comment on the effects on the $2023$ statement of comprehensive income with respect to parts $($a$)$ and $($b$).$

d$)$ Comment on the effects on the December $31,2023$ statement of financial position with respect to parts $($a$)$ and $($b$).$

e$)$ From the perspective of an investor in Jessi, discuss the financial statement effects of using the fair value model to determine the property$$s carrying amount.