Question: Michael Browne owns and operates a small engineering business. On the 1st October 2019 he acquired a new machine that cost $60,000. The manufacturer of

Michael Browne owns and operates a small engineering business. On the

Michael Browne owns and operates a small engineering business. On the 1st October 2019 he acquired a new machine that cost $60,000. The manufacturer of the machine installed it at Michael's business premises for $3,000. He anticipated that the machine would have a 5 year useful life and would be scrapped at the end of its useful life. Michael depreciated the machine using the diminishing balance method of depreciation at a rate of 20%. Narrations are not required for the journal entries. Required: a) Prepare the depreciation journal entries for the year ending 31 December 2019 and 2020 (4 marks)

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