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Question - An entity purchased equipment on January 2, 20x0 at a cost of $800,000. During 20x0, the entity received a government grant of $200,000 towards the purchase of the equipment. The $200,000 was credited to income in 20x0. The equipment is being depreciated using the diminishing balance method at a rate of 25%. The residual value of the equipment is estimated to be $50,000 at the end of it's 6 year useful life. In 20x2, you notice the error made in 20x0. Ignoring taxes, what journal entry will you write the beginning of 20x2 to correct the error?
Financial Statement Analysis and Preparation
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