1. On December 31, 20x1, DECAPITATE BEHEAD Co. decided to lease out under operating lease one of its buildings that was previously used as office space. The building has an original cost of ₱12,000,000 and accumulated depreciation of ₱8,000,000 as of January 1, 20x1. Annual depreciation is ₱400,000. DECAPITATE Co. uses the fair value model for investment property. The fair value of the building on December 31, 20x1 is ₱6,000,000. The entry to record the transfer of the building to investment property includes a: a. credit to gain on reclassification for ₱2,000,000. b. credit to revaluation surplus for ₱2,000,000. c. debit to building for ₱12,000,000. d. credit to revaluation surplus for ₱2,400,000.
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1. On December 31, 20x1, DECAPITATE BEHEAD Co. decided to lease out under operating lease
one of its buildings that was previously used as office space. The building has an original cost of
₱12,000,000 and
depreciation is ₱400,000. DECAPITATE Co. uses the fair value model for investment property.
The fair value of the building on December 31, 20x1 is ₱6,000,000. The entry to record the
transfer of the building to investment property includes a:
a. credit to gain on reclassification for ₱2,000,000.
b. credit to revaluation surplus for ₱2,000,000.
c. debit to building for ₱12,000,000.
d. credit to revaluation surplus for ₱2,400,000.
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