Question $3$

On $1$ January $2023,$ Bello Ltd acquired an office building for R$2500000$ as an investment property. The company uses the fair value model for its investment properties and has a financial year$-$end of $31$ December.

During the year, the following events occurred:

Bello Ltd spent R$700000$ to build a new conference hall within the building. which will be rented out under an operating lease.

Bello Ltd replaced the office building's heating system, which had been damaged by a fire. The cost of replacement was R$150000.$ The old heating system had a fair value of R$30000$ before the fire.

The company paid $R10000$ to replace broken windows and doors that wer damaged due to wear and tear.

The company incurred R$5000$ for routine maintenance services, includin cleaning and painting.

Additional Information:

All amounts are considered material.

Ignore taxation.

equired:

Prepare the journal entries for each transaction above.

Briefly explain the accounting treatment for capital improvements, repair write$-$offs under the fair value model for investment properties.