Change in Estimate, Depreciation. Hi-Lo Corporation elected to change its method of depreciation from the double-declining balance method to the straight-line method at the beginning of the current year. It acquired the equipment two years ago on January 1 for $ 300,000. The original estimated useful life was five years with an original scrap value of $ 18,000. The company is subject to a 40% income tax rate.
Required
a. Prepare the journal entry to record the change in depreciation method.
b. Draft a footnote disclosure for the change in depreciation method.