Question
Robillard Inc. acquired the following assets in January 2015: Equipment, estimated service life, 5 years; residual value, Tk. 15,000 Tk. 465,000 Building, estimated service life,
- Robillard Inc. acquired the following assets in January 2015:
Equipment, estimated service life, 5 years; residual value, Tk. 15,000 | Tk. 465,000 |
Building, estimated service life, 30 years; no residual value | Tk. 780,000 |
The equipment has been depreciated using the sum-of-the-years-digits method for the first 3 years for financial reporting purposes. In 2018, the company decided to change the method of computing depreciation to the straight-line method for equipment, but no change was made in the estimated service life or residual value. It was also decided to change the total estimated service life of the building from 35 years to 40 years, with no change in the estimated residual value. The building is depreciated on the straight-line method.
Required:
1. Prepare the journal entry to record depreciation expense for the equipment in 2018.
2. Prepare the journal entry to record depreciation expense for the building in 2018.
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