Example: You place an asset in service in Year 1, Quarter 1. The recoverable cost is $4,000 and you are depreciating the asset cost at a 20% flat-rate. In Year 2, Quarter 3, you change the flat-rate to 25%.
| Account Description | Debit | Credit |
|---|---|---|
| Depreciation Expense | 250.00 | |
| Depreciation Expense (adjustment) | 300.00 | |
| Accumulated Depreciation | 550.00 |
| Account Description | Debit | Credit |
|---|---|---|
| Depreciation Expense | 250.00 | |
| Accumulated Depreciation | 250.00 |