ABC Inc Is a Public Entity Which Applies the Fair Value

question 167

Multiple Choice

ABC Inc. is a public entity which applies the Fair Value Model to all of its Investment property. On January 1, Year 1, the company purchased Land held for resale for $120,000. This land was independently appraised at $100,000 on December 31^st, Year 1. The year-end adjusting journal entry would include:

• A) a loss of $20,000.
• B) a debit to Revaluation surplus - OCI- Land.
• C) a credit to depreciation expense of $20,000.
• D) a debit to contributed surplus of $20,000.