okay... I have been working on this problem all night, but I can't seem to be in the right track. Ill first introduce the problem, and then I'll put what I have so far, if someone can please let me know what I'm doing wrong.

Adjusting Entry for December 31, 2007:


The buildings have a $10,000 residual value and a 40-year useful life. The straight-line depreciation method is used. The building was purchased on July 6, 2006.

So, what I did, the buildings were $180,000. So I followed the formula and I got, $4250.
(180,000-10,000) / 40).

BUT, now, I don't know what to do next because the building was purchased on July 6, 2006. AND how would I journalize this, would it be a regular depreciation entry?

I REALLY NEED HELP!! Thanks!

Hopefully the other person who posted this question will see this. Everyone is letting the purchase date screw them all up.

You're doing the adjusting entry for 2007. 2006 is gone, done and over with. If you were making the entry for 2006, then the date would be relevant. Since it's now 2007, you depreciate a normal, full year of depreciation. You'll have 39 years of full depreciation at $4250, and then 2 years where it is split up since it was purchased mid year, the first and last years.