I am so lost on this. I need to prepare adjusting journal entry for this.
The truck was acquired on August 1. Franklin estimates the truck will have a useful life of 5 years and no salvage value. The depreciation on the building has already been recorded.
In my general ledger is says truck = $26,000 and the building = 100,000
The building
To prepare the adjusting journal entry for this scenario, you'll need to calculate the depreciation expense for the truck, considering its useful life and salvage value.
First, determine the annual depreciation expense for the truck. Divide the initial cost of the truck ($26,000) by its useful life (5 years):
$26,000 / 5 = $5,200
Next, you'll need to determine the calculated depreciation expense that has already been recorded for the building. Since the question states that the depreciation on the building has already been recorded, you'll want to find the amount of depreciation that has been taken prior to this point and hasn't been applied yet.
Once you have the amount, subtract it from the original cost of the building to find the remaining value.
Finally, you'll make the adjusting journal entry to record the depreciation of the truck and any remaining depreciation for the building. Assuming there is no salvage value for the truck or the building, the journal entry would look something like this:
Debit Depreciation expense - Truck $5,200
Credit Accumulated depreciation - Truck $5,200
Debit Depreciation expense - Building $X
Credit Accumulated depreciation - Building $X
In the second journal entry, replace $X with the remaining depreciation value for the building.
By recording these adjusting journal entries, you are accurately reflecting the depreciation expense for your truck and building, ensuring that your financial statements are up to date.