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APPLICATION EXERCISES property on 1 January 2015 f 1 Sinar Bhd, purchased a buiding ase purchase of property wasF Rv 50,0. The bu 1 Sinar Bhd. purchased a building as an investmen e build ul life of 25 years and a residual value of RM50,000. The buli e build million and RM7 million at 31 December 2015 and 2016, respectively. Si million. The legal cost relating to the purc is apprais Bhd. uses the cost model to account its investment propert December every year. The fair value of the building i to be RM6 6 also uses the straight-line method to depreciate it Required: Prepare all journal entrie non-current assets. ting to the acquisition of the property and any adjustir s rela tries required at 31 December 2015 and 2016 its investment property instead. Required: en 2 Refer to Question 1. Now assume that Sinar Bhd. applies the fair value model to accoun Prepare all journal entries relating to the acquisition of the property and any adjusting entries required at 31 December 2015 and 2016. Jeju Property Bhd. has leased out its building to BB Bhd. under an operating lease for five years. The lease commenced on 1 January 2016 when the value of the building was RM20 million. The financial year-end for Jeju Property Bhd. is 31 December every year The annual lease rental is RM2 million. BB Bhd. uses the building as a warehouse for its inventory 3 Required (a) Explain how the building should be accounted for in the book of Jeju Property Bhd (b) Show the journal entries necessary to record the above information