On January 1, 2016, Crane Corporation purchased a building

On January 1, 2016, Crane Corporation purchased a building to use as its factory, and some equipment to manufacture its product. The following information was determined at the time of purchase:

CostUseful LifeResidual ValueDepreciation
Building$2,320,00020 years$464,000Double Declining
Equipment$1,060,00025 years$106,000Straight Line


On January 1, 2019, Crane decided to change the depreciation method for the building to the straight-line method, as a result of a change in the pattern of benefits received. There was no change to the total useful life or the residual value of the building.

Crane also decided that the equipment would have a total useful life of only 13 years, with a residual value of only $50,000. The depreciation method for the equipment did not change. Prepare the journal entries to record depreciation for both assets for 2019.

 


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