Part 1: On January 1, 2020, Petro Garcia Inc. purchased with cash equipment with that cost $500,000 with a salvage value of $50,000 and an 9-year useful life. On December 31, 2021, after adjusting for straight-line depreciation, management projected the equipments future net cash flows to be $300,000 and its fair value to be $230,000. For 2022 and beyond, management also reduced the equipments useful life to a total of 5 years.

Prepare all journal entries related to this equipment for Petro Garcia Inc.

Date	Account	Debit	Credit
01/01/2020
12/31/2020
12/31/2021
12/31/2021
12/31/2022
12/31/2023
12/31/2024

Part 2:

What is the book value of the equipment on January 1, 2023?

$

Part 3: This part is independent and unrelated to parts 1 and 2. Suppose that in January 2022, this equipments projected cash flows are $450,000 and the fair value increased to $260,000. Prepare the journal entry, if necessary, to account for this fair value increase, assuming:

1. Petro continues to use the equipment in operations.
2. Petro decides to sell the equipment; thus, the equipment has been marked for sale.
3. Petro continues to use the equipment in operations, but instead of reporting under GAAP, Petro reports under IFRS.

Date	Account	Debit	Credit
(a)
01/XX/2022
(b)
01/XX/2022
(c)
01/XX/2022