Blue Company is in the process of preparing its financial statements for 2017. Assume that no entries for depreciation have been recorded in 2017. The following information related to depreciation of fixed assets is provided to you.

1.		Blue purchased equipment on January 2, 2014, for $86,600. At that time, the equipment had an estimated useful life of 10 years with a $4,600 salvage value. The equipment is depreciated on a straight-line basis. On January 2, 2017, as a result of additional information, the company determined that the equipment has a remaining useful life of 4 years with a $3,200 salvage value.
2.		During 2017, Blue changed from the double-declining-balance method for its building to the straight-line method. The building originally cost $280,000. It had a useful life of 10 years and a salvage value of $28,000. The following computations present depreciation on both bases for 2015 and 2016.

		2016		2015
Straight-line		$25,200		$25,200
Declining-balance		44,800		56,000

3.

Blue purchased a machine on July 1, 2015, at a cost of $130,000. The machine has a salvage value of $18,000 and a useful life of 8 years. Blues bookkeeper recorded straight-line depreciation in 2015 and 2016 but failed to consider the salvage value.

(a)

Prepare the journal entries to record depreciation expense for 2017 and correct any errors made to date related to the information provided. (Ignore taxes.) (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

No.	Account Titles and Explanation	Debit	Credit
1.
2.
3.
	(To record current year depreciation.)
	(To correct prior year depreciation.)