Accounting Fall 2019 Group Exercise 5 Changing an asset's useful life and residual value Senodal Industries uses straight-line depreciation on all of its depreciable assets. The company records annual depreciation expense at the end of each calendar year. On January 11, 2014, the company purchased a machine costing $90,000. The machine's useful life was estimated to be 12 years with an estimated residual value of $18,000. Depreciation for partial years is recorded to the nearest full month. In 2018, after almost five years of experience with the machine, management decided to revise its estimated life from 12 years to 20 years. No change was made in the estimated residual value. TThe revised estimate of the use- ful life was decided prior to recording annual depreciation expense for the year ended December 31, 2018 Required: Prepare journal entries in chronological order for the given events, beginning with the purchase of the ma- chinery on January 11, 2014. Show separately the recording of depreciation expense in 2014 through 2018. 2. 1. What factors may have caused the company to revise its estimate of the machine's useful life? Solution: Debit Credit Date Accounts and explanations