Catch up depreciaton posted for retired asset
Why is catch-up depreciation calculated to the asset as Accumulated Depreciation?
Catch-up depreciation is calculated to the asset as Accumulated Depreciation. The depreciation and retirement convention is "acquisition month no depreciation retirement month fully depreciation" and monthly depreciation.
Entries are as follows;
Proceeds of Sale Clearing DR 12200
NBV Retired DR 11000
Accumulated Depreciation DR 1000
Accumulated Depreciation DR 1000 (Catch up depreciation)
Proceeds of Sale CR 12200
Cost CR 12000
Depreciation Expense CR 1000
Retirement month - Feb 2023
Asset Date in Place Service - Oct 2022
Retirement transaction - Jul-23
Jul-23 depreciation program is not run.
Version (include the version you are using, if applicable):