Depreciation Journal Entry
Depreciation Journal Entry is the journal entry passed to record the reduction in the value of the fixed assets due to normal wear and tear, normal usage or technological changes, etc., where the depreciation account will be debited, and the respective fixed asset account will be credited. The main objective of a journal entry for depreciation expense is to abide by the matching principle.
The journal entry for depreciation refers to a debit entry to the depreciation expense account in the income statement and a credit journal entry to the accumulated depreciation account in the balance sheet. In each accounting period, a predetermined portion of the capitalized cost Capitalized Cost Capitalization cost is an expense to acquire an asset that the company will use for their business; such costs are recorded in the company’s balance sheet at the year-end. These costs are not deducted from the revenue but are depreciated or amortized over time. read more of existing fixed assets, such as equipment, building, vehicle, etc., is transferred from the fixed assets in the balance sheet to depreciation expense in the income statement so that the cost can be matched with the corresponding revenue generated by utilizing these assets.
- The “Accumulated Depreciation” account is captured under the asset heading of Property Plant and Equipment (PP&E ). This account is also referred to as a contra asset accountA Contra Asset AccountA contra asset account is an asset account with a credit balance related to one of the assets with a debit balance. When we add the balances of these two assets, we will get the net book value or carrying value of the assets having a debit balance.read more since it is an asset account with a credit balance. Given that the accumulated depreciation accountAccumulated Depreciation AccountThe accumulated depreciation of an asset is the amount of cumulative depreciation charged on the asset from its purchase date until the reporting date. It is a contra-account, the difference between the asset’s purchase price and its carrying value on the balance sheet.read more is a part of the balance sheet, its outstanding balance amount is carried over to the next accounting period. The credit balanceCredit BalanceCredit Balance is the capital amount that a company owes to its customers & it is reflected on the right side of the General Ledger Account. Usually, Liability accounts, Revenue accounts, Equity Accounts, Contra-Expense & Contra-Asset accounts tend to have the credit balance.read more of the accumulated depreciation account eventually becomes as large as the cost of the assets that are being depreciated.
- The “Depreciation Expense” account is a part of the income statementIncome StatementThe income statement is one of the company’s financial reports that summarizes all of the company’s revenues and expenses over time in order to determine the company’s profit or loss and measure its business activity over time based on user requirements.read more , and it is a temporary account. At the end of each accounting period, the balance from the depreciation expense account is moved to the accumulated depreciation account. The depreciation expense account will eventually begin the new accounting periodAccounting PeriodAccounting Period refers to the period in which all financial transactions are recorded and financial statements are prepared. This might be quarterly, semi-annually, or annually, depending on the period for which you want to create the financial statements to be presented to investors so that they can track and compare the company’s overall performance.read more with a zero balance.
Table of contents
You are free to use this image on your website, templates, etc, Please provide us with an attribution link How to Provide Attribution? Article Link to be Hyperlinked
Source: Depreciation Journal Entry (wallstreetmojo.com)
How to Write Interesting Reading Journal Entries
For students not familiar with keeping a class journal or writing short free response papers, the assignment can be intimidating and confusing. The good thing is that it doesn’t have to be. Journal entries are generally a lot less formal than essays, and if you understand the rationale behind journal entries you will find them easier to write.
A mistake many students make when writing journal entries is to include too much summary or re-narration. Your professor has already read the story, and there is no need for you to retell the entire story in your own words. Journal entries are not summaries, and you don’t have to go through the entire storyline before getting down to your analysis. Analyzing a text means examining the structure or the details of the text. To get started, think about the following aspects of the text and jot down whatever comes to your mind. Literary analysis is about getting your mind wrapped around the text and thinking critically about its components. Asking questions about the text is a great way to start the ball rolling, use this essay plagiarism changer to make your writing easier.
Look at the structure of the text. Does the author write in first person or third person? Does the narrator have a certain persona? Is the narrator involved in the story? Is the narrator omniscient, meaning that he or she can describe the inner thoughts and emotions of multiple characters? What effect does the choice of narrator have on the reading of the story? Do you think the story would have the same effect if it were to be told by a different narrator? Often the choice of narrator gives the reader a specific lens with which to interpret the story.
Other elements of the structure can also be written about in an English journal entry. Is the text written in verse, in regular paragraphs or with a lot of dialogue? Does the text move forward in time, or does it make use of flashbacks for dramatic effect? How does the author’s choice of setting, timing and style affect the reading of the piece?
Sample journal entry section: “It’s interesting that the author chooses to write the story from the point of slew of an eight-year-old girl. Seeing the plot unfold through the eyes of a naive child adds a different dimension to the text. At the same time, it can be frustrating for the reader not to be able to know what is going on in the plot from a more mature, grown-up viewpoint”
Write in your reading journal about any specific detail that caught your attention. How does the author use description or colors in the text? Does a certain object of the person seem to represent something greater? Is the way that a certain person is described a stereotype? How do the characters talk? Do any characters have a particular accent? What are the social classes of the characters? How do their positions in society relate to the overall story? How are women portrayed in the story? How are men portray in the story? Does the narrator have any biases or prejudices? Is there any scene that particularly stands out to you? Why does this scene resonate with you more than the others?
Sample journal entry section: “The way that the author represents women shows his fear of female sexuality. For example, when Celine walks into the room he describes her with ‘eyes like a viper looking for its next kill.’”
When analyzing a literary text, it is important to think about author motivation. What do you think was the point or goal of the text? Why did the author choose a certain time period or geographic location for the story? Why has the author portrayed certain characters in a more negative or positive light? Think about the author’s own background and history. How do you think the author’s own experiences play into the text? In a journal entry, it’s okay to make guesses. Thinking about motivation means asking all the “why” questions about the text.
Sample journal entry section: “It seems as if the author is writing a satiric portrait of the monastic life. I wonder what his own experiences were with the church, and if he believed all religious persons to be corrupt and hypocritical. In the text, he certainly portrays monks this way.”
Think about the greater canvas of the literary text you are reading. What significance may it have had when it was first published? How do you think the public reacted to it? Why do you think they would like or not like it? Is it similar to any other literary text that you have read? Does this piece bring up themes that are discussed in other works of literature from this time period? How does this piece of literature relate to the political and cultural context of the time?