Mafia Limited owned and leased out a building in Italia Road, Sintaly which was correctly classified as an investment property on the 31 December 2019. Mafia Limited decided to move into their building on the 30th June 2020. The fair value of the building was R10 000 000 on the 31 December 2019. On the 30 June 2020, the building had a fair value of R10 500 000 and a remaining useful life of 10 years.

Required: 

Differentiate between owner-occupied and investment property. (6) 3.2. Record the change in use above, by way of journal entries. 

PART B In 2020, Mafia Limited spent the following amounts on another of its investment properties, a building located, on the north east side of Sintaly. The tenants of the building are a supermarket, hardware shop and a takeaway. - The roof of the building was slightly damaged in a storm and Mafia Limited had to pay R85 000 to replace it. A section of the roof, with a carrying amount of R15 000, was scrapped. - Rates assessment for 2020 amounted to R12 500.

Required: 

Record the above transactions as journal entries for Mafia Limited.

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1 a Investment Property An Investment property is a land or Building or both held by the ... View the full answer