Answer:
The journal entry is shown below:
Explanation:
The journal entry is as follows for recording the depreciation:
Depreciation expense A/c.........................Dr $ 14,400
Accumulated depreciation...............Cr $ 14,400
Working Note:
Depreciation rate = 100 % / Number of years of life
= 100 % / 10 years
= 10%
This will be multiplied by 2
= 10% × 2
Depreciation rate = 20%
Using the double declining method:
In year 2019
Depreciation expense = Cost of purchasing × Depreciation rate
= $180,000 × 20%
= $36,000
In year 2020
Depreciation expense = ( Cost of purchasing - Depreciation expense of last year) × Depreciation rate
= ($180,000 - $36,000) × 20%
= $144,000 × 20%
= $28,800
Using the Straight Line method:
In the year 2021
Depreciation expense = (Cost of purchasing - Depreciation expense of 2 years) / Number of years of useful life
= ($180,000 - $64,800) / 8
= $115,200 / 8
= $14,400
