The construction of the Parramatta Light Rail is underway. The Stage 1 of the Parramatta Light Rail will connect Westmead to Carlingford via the Parramatta CBD and Camellia with a two-way track spanning 12 kilometres and is expected to open in 2024. The route will link Parramattas CBD and train station to the Westmead Health Precinct, Cumberland Precinct, CommBank Stadium, the Camellia Town Centre, the largest museum in NSW Powerhouse Parramatta, the private and social housing redevelopment at Telopea, Rosehill Gardens Racecourse and three Western Sydney University campuses.

Expecting growth in business, Parramatta Ltd undertook the following transactions;

Acquired in 2019 two blocks of land in North Parramatta, for the purposes of future residential development. The cost of Block X was $256,000 and Block Y was $356,000.

	2021 valuation ($)	2023 valuation ($)
Block X	224,000	308,000
Block Y	388,000	349,000

(B) Parramatta Ltd acquired some machinery at a cost of $2,200,000. As at 30 June 2022, the machinery had accumulated depreciation of $550,000 and an expected remaining useful life of three years.

On 30 June 2022, it was determined that the machinery could be sold at a price of $1,500,000 and that the costs associated with making the sale would be $80,000. Alternatively, the machinery is expected to be useful for another four years and it is expected that the net cash flows to be generated from the machine would be $540,000 over each of the next three years.

It is assessed that at 30 June 2022, the market would require a rate of return of 5 per cent on this type of machinery.

REQUIRED:

Assuming asset revaluations were undertaken for the land in both 2021 and 2023, provide the journal entries for both years. (3 Marks)

Determine whether any impairment loss needs to be recognised in relation to the machinery and, if so, provide the appropriate journal entry at 30 June 2022. Also, provide the journal entry to account for depreciation in 2023. (2 Marks)