Nokia purchases equipment for $1,000,000 on January 1, 2014. Nokia uses the straight-line method for depreciation....

Nokia purchases equipment for $1,000,000 on January 1, 2014. Nokia uses the straight-line method for depreciation. Nokia chooses to revaluate its equipment every December 31.

Please answer the following questions.

(1) On January 1, 2014, the equipment has a useful life of 5 years and its residual value is zero. The fair value of equipment on December 31, 2014 is $950,000. Prepare the necessary journal entries on December 31, 2014.

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(2) On January 1, 2015, the equipment has a useful life of 4 years and its residual value is zero. The fair value of equipment on December 31, 2015 is $500,000. Prepare the necessary journal entries on December 31, 2015.

Expert Solution

ekkarill92 answered 1 year ago

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