Creed Ltd and Nickleback Ltd Enter into a Contractual Agreement $\text { Creed Ltd's books: }$

Creed Ltd and Nickleback Ltd enter into a contractual agreement to form a joint arrangement,which is considered to be a joint operation on 1 July 2015.Creed Ltd is to contribute land and equipment and Nickleback Ltd agrees to contribute $8 million.It is agreed that they will share output,assets and future contributions in the ratio 60: 40 (Creed/Nickleback) .The contribution by Creed Ltd has an agreed fair value of $9 million for the land and $3 million for the equipment.The book value of the land is $8 million and the net book value of the machinery is $2 million.
What are the entries to record the formation of the joint operation in the books of Creed Ltd and Nickleback Ltd?

A)
$\text { Creed Ltd's books: }$
$\begin{array}{|c|l|r|r|}\hline & & (\$ 000) & (\$ 000) \\\hline \mathrm{Dr} & \text { Investment in JO } & 4000 & \\\hline \mathrm{Cr} & \text { Land } & & 3200 \\\hline \mathrm{Cr} & \text { Machinery } & & 800 \\\hline & & & \\\hline\end{array}$

$\text { Nickleback Ltd's books: }$
$\begin{array}{|c|l|r|r|}\hline \mathrm{Dr} & \text { Land } & 3600 & \\\hline \mathrm{Dr} & \text { Machinery } & 1200 & \\\hline \mathrm{Cr} & \text { Investment in JO } & & 4800 \\\hline\end{array}$
B)
$\begin{array}{l}\text { Creed Ltd's books: }\\\begin{array}{|c|l|r|r|}\hline & & (\$ 000) & (\$ 000) \\\hline \mathrm{Dr} & \text { Investment in JO } & 4800 & \\\hline \mathrm{Cr} & \text { Land } & & 3600 \\\hline \mathrm{Cr} & \text { Machinery } & & 1200 \\\hline & & & \\\hline\end{array}\end{array}$

$\begin{array}{l}\text { Nickleback Ltd's books: }\\\begin{array}{|c|l|r|r|}\hline \mathrm{Dr} & \text { Investment in JO } & 4800 & \\\hline \mathrm{Cr} & \text { Cash } & & 4800 \\\hline\end{array}\end{array}$
C)
$\begin{array}{l}\text { Creed Ltd's books: }\\\begin{array}{|l|l|r|r|}\hline & & (\$ 000) & (\$ 000) \\\hline \mathrm{Dr} & \text { Cash } & 4800 & \\\hline \mathrm{Cr} & \text { Land } & & 3200 \\\hline \mathrm{Cr} & \text { Machinery } & & 800 \\\hline \mathrm{Cr} & \text { Profit on sale of land } & & 400 \\\hline \mathrm{Cr} & \text { Profit on sale of machinery } & & 400 \\\hline\end{array}\end{array}$

$\begin{array}{l}\text { Nickleback Ltd's books: }\\\begin{array}{|c|l|r|r|}\hline \mathrm{Dr} & \text { Land } & 3600 & \\\hline \mathrm{Dr} & \text { Machinery } & 1200 & \\\hline \mathrm{Cr} & \text { Cash } & & 4800 \\\hline\end{array}\end{array}$
D)
$\begin{array}{l}\text { Creed Ltd's books: }\\\begin{array}{|l|l|r|r|}\hline & & (\$ 000) & (\$ 000) \\\hline \mathrm{Dr} & \text { Investment in JO } & 4800 & \\\hline \mathrm{Cr} & \text { Land } & & 3200 \\\hline \mathrm{Cr} & \text { Machinery } & & 800 \\\hline \mathrm{Cr} & \text { Asset revaluation reserve } & & 800 \\\hline & & & \\\hline\end{array}\end{array}$

$\begin{array}{l}\text { Nickleback Ltd's books: }\\\begin{array}{|l|l|r|r|}\hline \mathrm{Dr} & \text { Investment in JO } & 4800 & \\\hline \mathrm{Cr} & \text { Cash } & & 4800 \\\hline\end{array}\end{array}$