Chapter 004 The Income Statement and Statement of Cash Flows

Aggie Co. purchased equipment on January 1, 2004, at a cost of $650,000. The asset was estimated to have a 12-year life with a residual value of $50,000. Aggie uses straight-line depreciation. In 2009, Aggie revised its total estimated life to 10 years, with no residual value.

Required: Prepare journal entries to record Aggie's depreciation expense for 2008 and 2009. Show computations.