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Question 3 On 1 January 2023, Bello Ltd acquired an office building for...

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Accounting

Question 3
On 1 January 2023, Bello Ltd acquired an office building for R2500000 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 R700000 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 R150000. The old heating system had a fair value of R30000 before the fire.
The company paid R10000 to replace broken windows and doors that wer damaged due to wear and tear.
The company incurred R5000 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.
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