Polar Company purchased a building with an expected useful life of 40 years for $600,000 on January 1, 2016. The building is expected to have a residual value of $40,000.
Required:
a. Give the journal entries that would be made by Polar to record the building purchase in 2016 and the depreciation expense for 2016 and 2017, assuming straight-line depreciation is used.
b. Repeat part “a,” but now assume that the double-diminishing-balance is used.