Assets & depreciation · Level: Exam specials
Journal entry: Depreciation for part of a year
If an asset is bought during the year, the first year only gets the months from the month of purchase, which counts in full.
Worked example
A delivery van was bought on 1 April for £45,000.00 net. Useful life 5 years, straight-line, time-apportioned by month. Book the depreciation at 31 December.
Correct journal entry
Depreciation £6,750.00 / Vehicles £6,750.00
Debit
Depreciation£6,750.00
Credit
Vehicles£6,750.00
Why?
- Depreciation: expense incurred → debit
- Vehicles: asset decreases → credit
Calculation
- Per year: £45,000.00 ÷ 5 = £9,000.00
- 9 months (April to December): £9,000.00 × 9/12 = £6,750.00
Typical mistake
Leaving out the month of purchase or booking a full year.
Your turn
Three problems on exactly this case, with different numbers. Amounts work with or without separators, e.g. 2,400.00 or 2400.
Transaction
A delivery van was bought on 1 April for £49,680.00 net. Useful life 6 years, straight-line, time-apportioned by month. Book the depreciation at 31 December.
Debit
Assets up · expenses · liabilities down
Total debit£0.00
Credit
Liabilities up · income · assets down
Total credit£0.00
Frequently asked questions
What is the journal entry for depreciation for part of a year?
Example: Depreciation £6,750.00 / Vehicles £6,750.00.
How do I recognise this case?
If an asset is bought during the year, the first year only gets the months from the month of purchase, which counts in full.
What is the typical mistake?
Leaving out the month of purchase or booking a full year.