In 2020, Bailey Corporation discovered that equipment purchased on January 1, 2018, for $50,000 was expensed at

Question:

In 2020, Bailey Corporation discovered that equipment purchased on January 1, 2018, for $50,000 was expensed at that time. The equipment should have been depreciated over 5 years, with no salvage value. The effective tax rate is 30%. Prepare Bailey’s 2020 journal entry to correct the error. Bailey uses straight-line depreciation.

Salvage Value
Salvage value is the estimated book value of an asset after depreciation is complete, based on what a company expects to receive in exchange for the asset at the end of its useful life. As such, an asset’s estimated salvage value is an important... Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...

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