Part C Question 2 Accounting for Non-current Assets
On 1 July 2019 Fraser Ltd acquired an item of equipment with an acquisition cost of $810,000. The equipment can be used for 9 years.
On 30 June 2020, the end of financial year, the fair value of the equipment was $738,000.
The equipment was sold for $610,000 on 1 January 2021.
Non-current asset is depreciated evenly over the useful life and has no residual value. The company uses the revaluation model to record non-current asset. The income tax rate is 30%. Ignore GST.
Prepare relevant journal entries to record non-current asset in 2019/2020 and 2020/2021 financial years in accordance with AASB 116 and AASB 136. (Narrations are required, tax effect entries are required.)