Journal Entry for Building Depreciation

Journal Entry for Building Depreciation

Journal entry for building depreciation shall be recorded by debiting the depreciation account and crediting the accumulated depreciation for building. It is important to note that accumulated depreciation is a contra account for building.

Date	Particular	Ledger Folio	Dr.	Cr.
	Depreciation		xxx
	Accumulated Deprecation for Building			xxx

The deprecation may also be charged to building directly by debiting the depreciation account and crediting the building account.

Date	Particular	Ledger Folio	Dr.	Cr.
	Depreciation		xxx
	Building			xxx

 Example of Journal Entry for Building Depreciation

A building purchase for 100,000, the company decided to charge the depreciation at the rate of 5% on straight line. The journal entry per annum shall be charged as under

Under First Method

Depreciation is debited and accumulated depreciation is credited being decrease in asset (through contra account liability account).

Date	Particular	Ledger Folio	Dr.	Cr.
	Depreciation		5,000
	Accumulated Depreciation for Building			5,000

The first method allows better presentation of asset in the balance sheet.

Building at Cost	100,000
Accumulated Depreciation	5,000
Carrying Amount	95,000

Under Second Method

In this method depreciation is debited and asset is credited.

Date	Particular	Ledger Folio	Dr.	Cr.
	Depreciation		5,000
	Building			5,000

The second method reflects the limited information.

Building

95,000