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Question - On January 1st 2018, Box Inc. purchased a box-making machine for $300,000. They estimate that the machine has a service life of 7 years, and that the residual value of the machine at the end of its service life is $100,000. Box Inc uses the SYD method of depreciation for this machine.
On Jan 1st 2022, Box Inc revises the estimated service life of the machine to 9 years, and reduces the estimated residual value to $50,000. Box Inc also changes the depreciation method to straight-line depreciation.
(1) Provide the journal entries for Jan 1st 2022, when the service life and residual values of the machine is updated.
(2) Provide the journal entries on Dec 31st 2022 for the recognition of depreciation expense for 2022.
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