A company purchased equipment for $710,000 which was estimated to have a useful life of 10 years with a residual value of $10,000 at the end of that time. Depreciation has been entered for 7 years on a straight line basis. In 2011, it is determined that the total estimated life should be 15 years with a residual value of $4,000 at the end of that time.

Prepare the entry to correct the prior years depreciation.

Prepare the entry to record depreciation for 2011.