Question

Alteran Corporation purchased office equipment for $1.5 million at the beginning of 2022. The equipment is being depreciated over a 10-year life using the double-declining-balance method. The residual value is expected to be $300,000. At the beginning of 2024 (two years later), Alteran decided to change to the straight-line depreciation method for this equipment. Required: Prepare the journal entry to record depreciation for the year ended December 31, 2024. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations. Round your final answers to nearest whole dollars.

Record depreciation expense for 2024.

Answer 1

To record the depreciation for the year ended December 31, 2024, the journal entry should be Debit Depreciation Expense for $120,000 and credit Accumulated Depreciation for $120,000.

Step-by-step explanation:

To record the depreciation for the year ended December 31, 2024, we need to calculate the straight-line depreciation expense for the equipment. The formula for straight-line depreciation is: Depreciation Expense = (Cost - Residual Value) / Useful Life. In this case, the cost of the equipment is $1.5 million, the residual value is $300,000, and the useful life is 10 years. So, the depreciation expense for one year is ($1.5 million - $300,000) / 10 = $120,000.

To record this depreciation expense, the journal entry is:

1. Depreciation Expense 120,000
2. Accumulated Depreciation 120,000

The Depreciation Expense account is debited for $120,000, and the Accumulated Depreciation account is credited for $120,000.

Answer 2

To record depreciation for the year ended December 31, 2024, using the straight-line depreciation method, the annual depreciation needs to be calculated. The annual depreciation is $120,000. The journal entry to record the depreciation expense is to debit Depreciation Expense with $120,000 and credit Accumulated Depreciation with $120,000.

To prepare the journal entry to record depreciation for the year ended December 31, 2024, using the straight-line depreciation method, we need to calculate the annual depreciation first. The formula for straight-line depreciation is:

Depreciation Expense = Cost - Residual Value / Useful Life

Let's calculate the annual depreciation:

Depreciation Expense = $1,500,000 - $300,000 / 10 = $120,000

Now, we can prepare the journal entry:

Date Account Titles and Explanation

Dec 31, 2024 Depreciation Expense $120,000

Accumulated Depreciation $120,000

This entry records the depreciation expense for the year ended December 31, 2024, using the straight-line depreciation method. The Accumulated Depreciation account is credited to accumulate the total depreciation over the years.