Example: You place an asset in service in Year 1, Quarter 1. The asset cost is $4,000, the life is 4 years, and you are using straight-line depreciation. In Year 2, Quarter 2, you change the asset life to 5 years.
| Account Description | Debit | Credit |
|---|---|---|
| Depreciation Expense | 200.00 | |
| Accumulated Depreciation | 50.00 | |
| Depreciation Expense (adjustment) | 250.00 |
| Account Description | Debit | Credit |
|---|---|---|
| Depreciation Expense | 183.33 | |
| Accumulated Depreciation | 183.33 |