Answer:
journal entry to record depreciation on December 31, 2019 is
Debit Depreciation $8,000
Credit Accumulated Depreciation $8,000
journal entry to record depreciation on December 31, 2022.
Debit Depreciation $5,000
Credit Accumulated Depreciation $5,000
Explanation:
Depreciation is the systematic allocation of the cost of an asset to the income statement over the estimated useful life of that asset.
It is determined as the depreciable value of the asset over the estimated useful life of the asset where the depreciable value is the difference between the cost and salvage value of the asset
Mathematically,
Depreciation = (Cost - Salvage value)/Estimated useful life
Annual depreciation = (80000 - 16000)/8
= $8,000
Between July 1, 2019 and January 1 , 2022 is 2.5 years
Carrying amount of asset = $80,000 - 2.5($8,000)
= $60,000
If the company estimated the remaining useful life to be 10 years beyond December 31, 2022 and the salvage value is estimated to be $5,000, then
Depreciation = ($60,000 - $5,000)/11
= $5,000
