prepare journal entries (20 marks)

QUESTION TWO [28] Macaroni Limited has an investment property which it purchased at a cost of R20million on the 14 of January 2018. Macaroni Limited used this property for their admin division from date of purchase till the 31 of December 2019. Macaroni Limited found a more suitable smaller property for their admin division and will take occupation from the 1" of January 2020. Macaroni Limited entered into an operating lease with Cheese Limited for Cheese Limited to lease the purchased building from the 1 of January 2020, The building was to be used as an office block for Cheese Limited. The 5-year lease was entered into on the 1" of January 2020 and has the following terms: Lease rentals of a R100 000 per month payable in advance on the day of each month Macaroni Limited is responsible for the maintenance of the building The fair value of the investment property at 31" of December 2020 was R25 million, During the 2020-year, Macaroni Limited incurred R350 000 expenditure on the property as follows: R25 000 to replace on the globes in the building which blew during a power surge after loadshedding - 31 August 2020 R175 000 to build an extra parking floor to rent out to Macaroni Limited (under an operating lease) who leases a building next door however has run out of parking space - 30 September 2020 Damages to the lift system from the loadshedding - the lift system was quite outdated and therefore cannot be repaired. The lift system had to be replaced at a cost of R150 000. The FV of the damaged lift was R27 000. - 30 September 2020 Macaroni Limited accounts for investment property using the fair value model and property, plant and equipment using the cost model. Buildings classified as property, plant & equipment are depreciated on the straight line method to nil residual values over an expected life of 20 years. Required: Prepare the journal entries to record the above transactions in the books of Macaroni Limited for the year ended 31 December 2020. (Please include dates, narrations and workings as marks are awarded)