Grover Inc Wishes to Use the Revaluation Model for This

question 59

Multiple Choice

Grover Inc wishes to use the revaluation model for this property: The fair value for the property is $140,000. Assuming this is the first year of using the revaluation model, what amount would be booked to profit and loss if Grover chooses to use the elimination method to record the revaluation?

• A)$0
• B)$20,000 credit
• C)$20,000 debit
• D)$30,000 credit

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Definitions:

Nominal Risk-Free Rate

The rate of return on an investment with no risk of financial loss, not adjusted for inflation.

Yield Curve

A curve representing the yields of bonds with the same creditworthiness but varying expiration dates, measured at a specific moment.

Term Structure

The relationship between the interest rates or yields of bonds and their respective maturities.

Federal Government Bonds

Securities issued by a national government's treasury, often considered low-risk investments.