A Company Entered into the Following Transactions Concerning Its Computer

question 8

Essay

A company entered into the following transactions concerning its computer system:
On January 1,2009 purchased a computer system that cost $1,480,000.The estimated useful life of the computer is 3 years and salvage value is $40,000.Straight-line depreciation is to be used.On January 1,2010 the company determined that the estimated useful life of the computer would be 4 years instead of 3 years.The estimated salvage value will only be $10,000.
a. Prepare the journal entry to record depreciation expense for 2010.
b. Prepare the journal entry to record depreciation expense for 2010.

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Definitions:

Express Condition

A clearly stated, specific condition in a contract that must be met for the performance or continuation of that contract to be required.

Implied Condition

A condition in a contract that is not explicitly stated but is necessary for the performance of the contract.

Written Contract

A legally binding agreement between two or more parties that is put in writing and signed by the parties involved.

Installments

Regular partial payments made over a period of time to settle a debt or purchase price, rather than paying the total amount at once.