Accounting Journal entry for depreciation?
I am having a hard time with this journal entry:
Purchased Land and a building for $90,000 cash. The building had a fair market value of $80,000 and the Land had a fair market value of $10,000. (The Building will be depreciated on a straight line basis over 20 years with an $8,000 residual value)
Land is not depreciated, so there is no entry for that.
Debit Depreciation Expense 3,600
Credit Accumulated Depreciation - Building 3,600
(80,000 - 8,000) / 20 = 3,600