Recording a Change in Accounting Estimate

Epsom Company purchased a machine that cost $75,000 on January 1, eight years ago. The estimated useful life was 12 years, and the estimated residual value was $0. Straight-line depreciation is used. At the start of the current year, before making any adjusting entry to record depreciation expense for that year, the company decided that the machine should be depreciated over a 15-year total useful life.

a. Prepare the adjusting entry at December 31 of the current year for annual depreciation expense.

Round the answers to the nearest dollar.

b. Prepare the correcting entry required, if any, at December 31 of the current year. If none is required, provide the reason.

If no correcting entry was required, select the reason. If a correcting entry was required, select "N/A" as your answer.