Asuncion Company purchased some equipment on January 2, 2011, for $24,000 . The company used straight-line depreciation based on a ten-year estimated life with no residual value. During 2014, management decided that this equipment could be used only three more years and then would be replaced with a technologically superior model. What entry should the company make as of January 1 . 2014, to
reflect this change?
a. No entry
b. Debit a Prior Period Adjustment account for $4,800 and credit accumulated depreciation for $4,800.
c. Debit Retained Earnings for $4,800 and credit accumulated depreciation for $4,800.
d. Debit Depreciation Expense for $4,800 and credit Accumulated Depreciation for $4,800.
A
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