Problem
Carrier Ltd purchased equipment on 1 July 2021 for a cost of $12 million. The equipment had an expected useful life of 5 years and residual of $2 million Carrier Ltd uses the straight-line method of depreciation. Carrier Ltd uses the cost model method to value the equipment. On 30 June 2022 the equipment had A fair value of $7 million Estimated cost to sell of $400,000 Value in use of $7.5 million.
Task
• Show the general journal entries for the year ended 30 June 2022.
• Show all workings and justify the entries according to the accounting standard.