For financial reporting, Clinton Poultry Farms has used the declining-balance method of depreciation for conveyor equipment acquired at the beginning of 2018 for $2,560,000. Its useful life was estimated to be six years with a $160,000 residual value. At the beginning of 2021, Clinton decides to change to the straight-line method. The effect of this change on depreciation for each year is as follows:

Year Straight-Line Declining Balance Difference
2018 $400 $853 $453
2019 400 569 169
2021 400 379 (21)
$1,200 $1,801 $601

Required:
Prepare any 2018 journal entry related to the change?

A change in the depreciation method is not a change of accounting policies. Therefore, this change will not require any retrospective journal entry for 2018. Changes in depreciation methods are prospective, meaning that they affect future values, not past values. This is considered a change in an accounting estimate.

Explanation:

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