Agricultural Entity (AE) Purchased 200 Hectares of Land on January

Essay

Agricultural Entity (AE) purchased 200 hectares of land on January 1, 20X7 and appropriately recorded it as investment property with a carrying value of $2,500,000. AE uses the fair value method to account for the property. At the end of 20X7, the fair value of the land was $2,250,000. At the end of 20X8, the land was appraised at a fair value of $2,275,000. Give the journal entries to adjust the carrying value of the land to fair value at the end of 20X7 and 20X8.