To record the adjustment for depreciation, the necessary adjusting entry would be as follows:
Date: [End of the accounting period]
Depreciation Expense $8,120
Accumulated Depreciation - Building $8,120
Step-by-step explanation:
This adjusted entry recognizes the depreciation expense incurred on the building for the current year. Depreciation is the allocation of a long-term asset, such as a building, over its useful life.
The debit to Depreciation Expense increases the expense account, reflecting the amount of depreciation expense for the current year. The credit to Accumulated Depreciation - Building increases the contra-asset account, which accumulates the total depreciation expense on the building since its acquisition.
It is imperative to note that the entry assumes that there is no existing balance in the Accumulated Depreciation - Building account before this adjustment. If there is a previous balance, it should be considered in the adjusted entry. Additionally, the shelf life and depreciation methods used for the building are not provided. However, these factors would be considered in calculating the annual depreciation expense.