Moore, an investment property company, has been constructing a new cinema building for the last 18 months. At 31 December 20X7, the cinema was nearing completion, and the costs incurred to date were:$mMaterials, labour and sub-contractors 14.8Other directly attributable overheads 2.5Interest on borrowings 1.3The building is deemed to be a qualifying asset and therefore any borrowing costs are capitalised as part of the cost of the building. A specific loan of $18million was obtained to fund this project and the annual rate of interest rate is 9.5%.During the three months to 31 March 20X8 the project was completed, with the following additional costs incurred:$mMaterials, labour and sub-contractors 1.7Other directly attributable overheads 0.3The company was not able to determine the fair value of the property reliably during the construction period and so used the allowance within IAS 40 Investment Property to measure at cost until construction was complete.On 31 March 20X8, the company obtained a professional appraisal of the cinema’s fair value, and the valuer concluded that it was worth $24 million. The fee for his appraisal was $100,000, and has not been included in the above figures for costs incurred during the three months.The cinema was taken by a national multiplex chain on an operating lease as at 1 April 20X8, and was immediately welcoming capacity crowds. The lease agreement allows for annual revisions, and it was therefore clear that it was worth even more than the valuation at 31 March 20X8. Following a complete valuation of the company’s investment properties at 31 December 20X8, the fair value of the cinema was established at $28 million.Required:Set out the accounting entries in respect of the cinema complex for the year ended 31 December 20X8.

Moore, an investment property company, has been constructing a new cinema building for the last 18 months. At 31 December 20X7, the cinema was nearing completion, and the costs incurred to date were:$mMaterials, labour and sub-contractors 14.8Other directly attributable overheads 2.5Interest on borrowings 1.3The building is deemed to be a qualifying asset and therefore any borrowing costs are capitalised as part of the cost of the building. A specific loan of$18million was obtained to fund this project and the annual rate of interest rate is 9.5%.During the three months to 31 March 20X8 the project was completed, with the following additional costs incurred:$mMaterials, labour and sub-contractors 1.7Other directly attributable overheads 0.3The company was not able to determine the fair value of the property reliably during the construction period and so used the allowance within IAS 40 Investment Property to measure at cost until construction was complete.On 31 March 20X8, the company obtained a professional appraisal of the cinema’s fair value, and the valuer concluded that it was worth$24 million. The fee for his appraisal was $100,000, and has not been included in the above figures for costs incurred during the three months.The cinema was taken by a national multiplex chain on an operating lease as at 1 April 20X8, and was immediately welcoming capacity crowds. The lease agreement allows for annual revisions, and it was therefore clear that it was worth even more than the valuation at 31 March 20X8. Following a complete valuation of the company’s investment properties at 31 December 20X8, the fair value of the cinema was established at$28 million.Required:Set out the accounting entries in respect of the cinema complex for the year ended 31 December 20X8.