Wilcox Company purchased a minicomputer on January 1, year 1, at a cost of $50,000. The computer was depreciated using the straight-line method over an estimated five-year life with an estimated residual value of $5,000. On January 1, year 3, the estimate of useful life was changed to a total of 10 years, and the estimate of residual value was changed to $800.

Required:

1. Prepare the appropriate adjusting entry for depreciation in year 3 to reflect the revised estimate.

2. Repeat requirement 1 assuming that the company uses the sum-of-the-years-digits method instead of the straight-line method.