Titan Ltd purchased machinery on 1 January 2014 for $400,000 cash with installation costs of $100,000. The useful life was expected to be 5 years, with an estimated scrap value of $40,000.

On 31 December 2015, the machinery was revalued down by $36,000.

On 31 December 2016, the fair value of the machinery was estimated to be $250,000.

The company also purchased a new motor vehicle for cash on the 1 January 2016 for $60,000. At this date, the accountant determined the motor vehicle has a useful life of 4 years and no residual value.

On 31 December 2016, the motor vehicle had a value in use of $38,000, a fair value of $36,000 and costs to sell of $2,000.

Titan Ltd uses straight-line method of depreciation.

Required:

(a) Prepare all journal entries relating to the machinery for years ended 31 Dec 2015 and 31 December 2016 assuming the asset is recorded under the fair value basis

(b) Prepare all journal entries relating to the motor vehicle for year ended 31 December 2016 assuming the asset is recorded under the cost basis