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on august 16, 2016. Bryant Corp. acquires a new piece of equipment for $80,000. Bryant depreciates...

on august 16, 2016. Bryant Corp. acquires a new piece of equipment for $80,000. Bryant depreciates equipment over ten years, assumes residual value to be 5% of the purchase price, and uses a helf-year convention in the year of acquisition. Record the journal entries for depreciation for 2017 and 2018.  

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Answer #1

Calculation of yearly depreciation

(Asset value on purchase - salvage value)/ useful life of the asset

(80000- 5%of 80000)/10

(80000-4000)/10 = 7600

In the year of purchase i.e, 2016 half yearly convention is used, hence, In the year 2016 depreciation charged is

7600/2 = 3800

In the year 2017 and 2018 depreciation will be 7600

Journal Entry

Particulars Debit Credit
Depreciation Expense 7600
Accumulated Depreciation on new equipment 7600
( Being Depreciation Charged for the year 2017)
Particulars Debit Credit
Depreciation Expense 7600
Accumulated Depreciation on new equipment 7600
( Being Depreciation Charged for the year 2018)
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