On April 13, 2023, Swifty Ltd. purchased a small apartment building with eight suites. The building qualified as an investment property under IAS 40. At the time of purchase, six out of the eight suites were rented. Swifty paid the following items at the time of its acquisition of the apartment building (all items were paid in cash except for the building itself, for which Swifty took out a mortgage): Purchase price of building $4,050,000 Legal fees 7,720 Property transfer fees 24,500 Painting of empty apartments 5,390 Advertising for empty apartments 2,000 On April 14 the previous owner of the apartment building paid Swifty $13,000 for damage deposits from the existing tenants. On December 31, 2023, the apartment building had a fair value of $4,250,000. On December 31, 2024, it was determined that the apartment building had a fair value of $4,040,000. Assuming Swifty follows IFRS, prepare the journal entries required to record the above events. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List all debit entries before credit entries. Record entries in the order presented in the problem.)
On April 13, 2023, Swifty Ltd. purchased a small apartment building with eight suites. The building qualified as an investment property under IAS 40. At the time of purchase, six out of the eight suites were rented. Swifty paid the following items at the time of its acquisition of the apartment building (all items were paid in cash except for the building itself, for which Swifty took out a mortgage): Purchase price of building $4,050,000 Legal fees 7,720 Property transfer fees 24,500 Painting of empty apartments 5,390 Advertising for empty apartments 2,000 On April 14 the previous owner of the apartment building paid Swifty $13,000 for damage deposits from the existing tenants. On December 31, 2023, the apartment building had a fair value of $4,250,000. On December 31, 2024, it was determined that the apartment building had a fair value of $4,040,000. Assuming Swifty follows IFRS, prepare the journal entries required to record the above events. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List all debit entries before credit entries. Record entries in the order presented in the problem.)
Chapter10: Cost Recovery On Property: Depreciation, Depletion, And Amortization
Section: Chapter Questions
Problem 60P
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Account Titles and Explanation
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Transcribed Image Text:On April 13, 2023, Swifty Ltd. purchased a small apartment building with eight suites. The building qualified as an investment property under IAS 40. At the time of purchase, six
out of the eight suites were rented. Swifty paid the following items at the time of its acquisition of the apartment building (all items were paid in cash except for the building
itself, for which Swifty took out a mortgage):
Purchase price of building $4,050,000
Legal fees 7,720
Property transfer fees 24,500
Painting of empty apartments 5,390
Advertising for empty apartments 2,000
On April 14 the previous owner of the apartment building paid Swifty $13,000 for damage deposits from the existing tenants.
On December 31, 2023, the apartment building had a fair value of $4,250,000. On December 31, 2024, it was determined that the apartment building had a fair value of
$4,040,000.
Assuming Swifty follows IFRS, prepare the journal entries required to record the above events. (Credit account titles are automatically indented when the amount is entered. Do
not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List all debit entries before credit entries. Record entries in the
order presented in the problem.)
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