SheridanCorporation owns and manages a small 10-store shopping centre, which it classifies as an investment property.Sheridanhas a May 31 year end and initially recognized the property at its acquisition cost of $11.2million on June 2, 2019. The acquisition cost consisted of the purchase price of $10.5million, costs to survey and transfer the property of $460,000, and legal fees to acquire the property of $240,000.Sheridandetermines that approximately26% of the shopping centre's value is attributable to the land, with the remainder attributable to the building. The following fair values are determined:

DateFair Value

May 31, 2020 $10,700,000

May 31, 2021 $10,594,000

May 31, 2022 $11,208,000

Sheridanexpects the shopping centre building to have a35-year useful life and a residual value of $1.428million.Sheridanuses the straight-line method for depreciation.

Assume thatSheridandecides to apply the cost model. What journal entries, if any, are required each year?

sr. no. date entry debit credit

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Assume thatSheridandecides to apply the fair value model. Prepare the journal entries, if any, required at each year end.

sr. no. date entry debit credit

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