Prepare the journal entries required for 2017, 2018, and 2019, assuming that Lavander applies the cost model to all of its investment property.

Here are the journal entries required for 2017, 2018, and 2019, assuming that Lavander applies the fair value model to all of its investment property.

PROBLEM QUESTION BASIS:

On March 1, 2017, Lavander Corp. acquired a 10-unit residential complex for $1,274,870, paid in cash. An independent appraiser determined that 73% of the total purchase price should be allocated to buildings, with the remainder allocated to land. On the date of acquisition, the estimated useful life of the building was 27 years, with estimated residual value of $324,770. Lavander estimates that straight-line depreciation would best reflect the pattern of benefits to be received 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, 2017		$1,321,750
December 31, 2018		$1,254,960
December 31, 2019		$1,222,850

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

Date Account Titles and Explanation Debit Credit Mar. 1, 2017