VCE Accounting Unit 4

1. 16.7
JOURNAL ENTRIES FOR
DEPRECIATION

2. © Michael Allison, Trinity Grammar School.
Author’s permission required for external use
 The General Journal entries required for reducing balance
depreciation are the same as for straight-line depreciation
16.7 JOURNAL ENTRIES FOR
DEPRECIATION
Debit Credit
Expenses  
Depreciation [E]
Debit Credit
Expenses  
Debit Credit
Expenses  
Debit Credit
Negative Asset  
Accumulated Depreciation [-A]
Debit Credit
Negative Asset  
Debit Credit
Negative Asset  

3. © Michael Allison, Trinity Grammar School.
Author’s permission required for external use
16.7 JOURNAL ENTRIES FOR
DEPRECIATION
2015 2016 2017
Depreciation
$2,000
Depreciation
$2,000
Depreciation
$2,000
Debit Credit
Negative Asset  
Accumulated Depreciation [-A]
31 Dec 2015 Depreciation – Vehicle 2000
31 Dec 2016 Depreciation – Vehicle 2000
31 Dec 2017 Depreciation – Vehicle 2000
Debit Credit
Expenses  
Depreciation [E]
31 Dec 2019 Acc. Depreciation – Vehicle 2000 31 Dec 2015 Depreciation – Vehicle 2000
Straight-line depreciation
Debit Credit
Expenses  
Depreciation [E]
31 Dec 2015 Acc. Depreciation – Vehicle 2000 31 Dec 2015 Depreciation – Vehicle 2000
Debit Credit
Negative Asset  
Accumulated Depreciation [-A]
31 Dec 2015 Depreciation – Vehicle 2000
31 Dec 2016 Depreciation – Vehicle 2000
31 Dec 2017 Depreciation – Vehicle 2000
Depreciation [E]
31 Dec 2015 Acc. Depreciation – Vehicle 2000 31 Dec 2015 Depreciation – Vehicle 2000
Accumulated Depreciation [-A]
31 Dec 2015 Depreciation – Vehicle 2000
31 Dec 2016 Depreciation – Vehicle 2000
31 Dec 2017 Depreciation – Vehicle 2000
Depreciation [E]
31 Dec 2016 Acc. Depreciation – Vehicle 2000 31 Dec 2015 Depreciation – Vehicle 2000
Depreciation [E]
31 Dec 2016 Acc. Depreciation – Vehicle 2000 31 Dec 2015 Depreciation – Vehicle 2000
Depreciation [E]
31 Dec 2017 Acc. Depreciation – Vehicle 2000 31 Dec 2015 Depreciation – Vehicle 2000
Accumulated Depreciation [-A]
31 Dec 2015 Depreciation – Vehicle 2000
31 Dec 2016 Depreciation – Vehicle 2000
31 Dec 2017 Depreciation – Vehicle 2000

4. © Michael Allison, Trinity Grammar School.
Author’s permission required for external use
16.7 JOURNAL ENTRIES FOR
DEPRECIATION
2015 2016 2017
Depreciation
$2,200
Depreciation
$1,900
Depreciation
$1,500
Debit Credit
Negative Asset  
Accumulated Depreciation [-A]
31 Dec 2015 Depreciation – Vehicle 2000
31 Dec 2016 Depreciation – Vehicle 2000
31 Dec 2017 Depreciation – Vehicle 2000
Debit Credit
Expenses  
Depreciation [E]
31 Dec 2019 Acc. Depreciation – Vehicle 2000 31 Dec 2015 Depreciation – Vehicle 2000
Reducing balance depreciation
Debit Credit
Expenses  
Depreciation [E]
31 Dec 2015 Acc. Depreciation – Vehicle 2200 31 Dec 2015 Depreciation – Vehicle 2000
Debit Credit
Negative Asset  
Accumulated Depreciation [-A]
31 Dec 2015 Depreciation – Vehicle 2200
31 Dec 2016 Depreciation – Vehicle 2000
31 Dec 2017 Depreciation – Vehicle 2000
Depreciation [E]
31 Dec 2015 Acc. Depreciation – Vehicle 2000 31 Dec 2015 Depreciation – Vehicle 2000
Accumulated Depreciation [-A]
31 Dec 2015 Depreciation – Vehicle 2200
31 Dec 2016 Depreciation – Vehicle 1900
31 Dec 2017 Depreciation – Vehicle 2000
Depreciation [E]
31 Dec 2016 Acc. Depreciation – Vehicle 1900 31 Dec 2015 Depreciation – Vehicle 2000
Depreciation [E]
31 Dec 2016 Acc. Depreciation – Vehicle 2000 31 Dec 2015 Depreciation – Vehicle 2000
Depreciation [E]
31 Dec 2017 Acc. Depreciation – Vehicle 1500 31 Dec 2015 Depreciation – Vehicle 2000
Accumulated Depreciation [-A]
31 Dec 2015 Depreciation – Vehicle 2200
31 Dec 2016 Depreciation – Vehicle 1900
31 Dec 2017 Depreciation – Vehicle 1500

5. © Michael Allison, Trinity Grammar School.
Author’s permission required for external use
16.7 JOURNAL ENTRIES FOR
DEPRECIATION
General Journal
Date Account DEBIT CREDIT DEBIT CREDIT
31 Dec
2015
Depreciation – Vehicle [E] 2,000
Accumulated Depreciation – Vehicle [-A] 2,000
Vehicle depreciated for 12-months using reducing
balance method (Memo 1)
Depreciation – Vehicle [E]
Accumulated Depreciation – Vehicle [-OE]
Debit Credit
Expenses  
Debit Credit
Negative Asset  
General Journal
Date Account DEBIT CREDIT DEBIT CREDIT
31 Dec
2015
Depreciation – Vehicle [E] 2,000
Accumulated Depreciation – Vehicle [-A] 2,000
Vehicle depreciated for 12-months using reducing
balance method (Memo 1)
General Journal
Date Account DEBIT CREDIT DEBIT CREDIT
31 Dec
2015
Depreciation – Vehicle [E] 2,000
Accumulated Depreciation – Vehicle [-A] 2,000
Vehicle depreciated for 12-months using reducing
balance method (Memo 1)
General Journal
Date Account DEBIT CREDIT DEBIT CREDIT
31 Dec
2015
Depreciation – Vehicle [E] 2,000
Accumulated Depreciation – Vehicle [-A] 2,000
Vehicle depreciated for 12-months using reducing
balance method (Memo 1)
Depreciation – Vehicle [E]
31 Dec 15 Accumulated dep’n – Vehicle 2200
Debit Credit
Expenses  
General Journal
Date Account DEBIT CREDIT DEBIT CREDIT
31 Dec
2015
Depreciation – Vehicle [E] 2,200
Accumulated Depreciation – Vehicle [-A] 2,000
Vehicle depreciated for 12-months using reducing
balance method (Memo 1)
Accumulated Depreciation – Vehicle [-OE]
31 Dec 15 Depreciation – Vehicle 2200
Debit Credit
Negative Asset  
General Journal
Date Account DEBIT CREDIT DEBIT CREDIT
31 Dec
2015
Depreciation – Vehicle [E] 2,200
Accumulated Depreciation – Vehicle [-A] 2,200
Vehicle depreciated for 12-months using reducing
balance method (Memo 1)
General Journal
Date Account DEBIT CREDIT DEBIT CREDIT
31 Dec
2015
Depreciation – Vehicle [E] 2,200
Accumulated Depreciation – Vehicle [-A] 2,200
Vehicle depreciated for 12-months using reducing
balance method (Memo 1)
Use a separate
depreciation ledger
for each Asset

6. © Michael Allison, Trinity Grammar School.
Author’s permission required for external use
16.7 JOURNAL ENTRIES FOR
DEPRECIATION
General Journal
Date Account DEBIT CREDIT DEBIT CREDIT
31 Dec
2015
Depreciation – Vehicle [E] 2,200
Accumulated Depreciation – Vehicle [-A] 2,200
Vehicle depreciated for 12-months using reducing
balance method (Memo 1)
Narration:
• Type of asset (e.g. “vehicle”)
• Periods depreciated (e.g. 12-months)
• Method of depreciation (e.g.
“reducing balance”)
• Memo #

7. © Michael Allison, Trinity Grammar School.
Author’s permission required for external use
TASK
In-class Homework
SQ7 X
Ex16.3 X
Ex16.4 X
Ex16.5 X
Ex16.6 X
Ex16.7 X