Part C Question 2 Accounting for Non-current Assets

On 1 July 2018 Fraser Ltd acquired an item of equipment with an acquisition cost of $400,000. The equipment can be used for 8 years.

On 30 June 2019, the end of financial year, the fair value of the equipment was $357,000.

The equipment was sold for $330,000 on 1 January 2020.

Non-current asset is depreciated evenly over the useful life and has no residual value. The company uses the revaluation model to record non-current asset. The income tax rate is 30%. Ignore GST.

Required:

Prepare relevant journal entries to record non-current asset in 2018/2019 and 2019/2020 financial years in accordance with AASB 116 and AASB 136. (Narrations are required, tax effect entries are required.)