On March 1, 2023, Bridgeport Corp. acquired a 10-unit residential complex for $1,263,000, paid in cash. An independent appraiser determined that 75% of the total purchase price should be allocated to buildings, with the remainder allocated to land. On the date of acquisition, the building's estimated useful life was 25 years, with estimated residual value of $325,200. Bridgeport estimates that straight-line depreciation would best reflect the pattern of benefits it will receive from the building. Fair value of the complex, as assessed by an independent appraiser on each date, is as follows: Date December 31, 2023 December 31, 2024 December 31, 2025 Fair Value $1,321,980 $1,254,660 $1,223,000 The complex qualifies as an investment property under IAS 40 Investment Property. Bridgeport has a December 31 year end.
On March 1, 2023, Bridgeport Corp. acquired a 10-unit residential complex for $1,263,000, paid in cash. An independent appraiser determined that 75% of the total purchase price should be allocated to buildings, with the remainder allocated to land. On the date of acquisition, the building's estimated useful life was 25 years, with estimated residual value of $325,200. Bridgeport estimates that straight-line depreciation would best reflect the pattern of benefits it will receive from the building. Fair value of the complex, as assessed by an independent appraiser on each date, is as follows: Date December 31, 2023 December 31, 2024 December 31, 2025 Fair Value $1,321,980 $1,254,660 $1,223,000 The complex qualifies as an investment property under IAS 40 Investment Property. Bridgeport has a December 31 year end.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Prepare the journal entries required for 2023, 2024, and 2025, assuming that Bridgeport applies the fair value model to all of its
investment property. (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.)
Date
11
Account Titles and Explanation
Debit.
Credit
Transcribed Image Text:ent Attempt in Progress
On March 1, 2023, Bridgeport Corp. acquired a 10-unit residential complex for $1,263,000, paid in cash. An independent appraiser
determined that 75% of the total purchase price should be allocated to buildings, with the remainder allocated to land. On the date of
acquisition, the building's estimated useful life was 25 years, with estimated residual value of $325,200. Bridgeport estimates that
straight-line depreciation would best reflect the pattern of benefits it will receive from the building. Fair value of the complex, as
assessed by an independent appraiser on each date, is as follows:
Date
December 31, 2023
December 31, 2024
December 31, 2025
Fair Value
$1,321,980
$1,254,660
$1,223,000
The complex qualifies as an investment property under IAS 40 Investment Property. Bridgeport has a December 31 year end.
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