Yesler Corporation replaced an HVAC system for one of its warehouses in July, 2015, at a cost of $350,000. The accountant recording the purchase charged it to repairs and maintenance expense. The error was discovered early in 2017 while reconciling depreciation expense for 2016. The system should last about 7 years with no salvage value. What entry should be made before the 2016 books are closed if the company uses straight-line depreciation?

Account Debit Credit HVAC System 350,000 Accumulated Depreciation 50,000 Retained Earnings-Prior Period Adj. 300,000

Account Debit Credit Retained Earnings-Prior Period Adj. 350,000 Depreciation Expense 50,000 HVAC System 400,000

Account Debit Credit HVAC System 350,000 Depreciation Expense (2016) 50,000 Accumulated Depreciation 75,000 Retained Earnings-Prior Period Adj. 325,000

Account Debit Credit HVAC System 350,000 Depreciation Expense 50,000 Retained Earnings-Prior Period Adj. 400,000