So up to this point when we've been buying our fixed assets, we've been doing it on the first day of the year, it's always been January one. What happens if we don't buy the fixed asset on the first day of the year? How does that affect our depreciation calculations? Let's check it out. So if we purchased an asset in the middle of an accounting of pre, middle of an accounting period, we have to take partial depreciation, partial depreciation for that period. Right? If we didn't buy it on the first day of the year, right, we bought it on some other day, well, we're not gonna take a full years of depreciation. We have to prorate it for the amount of time that we've owned it. Okay, So for straight line and double declining balance when we do those methods, what we're gonna do to calculate the partial depreciation first, we'll calculate the full year depreciation and then we're gonna adjust it for the time period that we actually owned it. Okay, for the units of production method? Well, the beauty of that, remember we didn't talk about years when we talked about units of production. We were talking about a number of units. So if we bought it in the middle of the year, that probably just means we'll have a smaller amount of units in that year. But that doesn't change our calculation at all. We don't really have to adjust our calculations already. The calculation already adjusts based on the number of units we produce. Cool. So let me show you what I mean? Here, we'll start with a straight line depreciation method. And let's do this example on october 1st year one, johnson and johnson and johnson company purchased the delivery truck for 42,000. The company estimated a useful life of five years and residual value of $2000. If the company uses the straight line method for depreciation, what would be the entry to record depreciation when preparing the december 31st year one financial statements and the netbook value on that date? So notice we didn't buy it on January one. And this is a way that teachers love to trick you because this, you could just ghost over the date, right? You might not pay much attention to these dates, but this is a crucial way for them to take points away. Okay, so you want to be really careful when you're reading dates and make sure that you adjust for these partial time periods. So the first thing we wanna do is account for the whole year. We wanted to say what would depreciation have been if it was a full year. So we're gonna do our straight line method and we're gonna find a depreciation expense Per year, right? Let's start by finding our depreciation expense per year, which is just using our formula of cost 42,000 minus residual value, 2000. And we divided by the useful life of five years and it tells us it's 8000 per year, right? So if it's 8000 per year? Well we didn't own it for a whole year, right? We only owned it for how long of the year it was October one that we bought it. So we owned it October all of October all of November and all of December. That's three months out of the 12 months. So we need to pro rate this from being a whole year's amount to being for three out of the 12 months. So what we're gonna do is we take that 8000 per year and we're gonna multiply it. Let me do it in a different color. We're gonna multiply it by the time factor of the time we've actually owned it, we've owned it for three out of the 12 months. So we multiply it by three twelves and this is gonna be our depreciation for the year, 8000 times three twelves. What does that give us? 2000 is gonna be our depreciation expense. Okay, so we would make a journal entry, debuting depreciation expense for 2000 and crediting accumulated depreciation for 2000. Let me write that in here since the question was actually asking us for that. So I'll do it here at the bottom a little small, we're going to debit depreciation expense for 2000 and we're gonna credit accumulated depreciation, I'm gonna just put a slash D. For 2000. Okay, so that would be the journal entry that we make. And then what's gonna be our net book value? Well, our net book value, That's just equal to the cost. We paid 42,000 Minour our accumulated depreciation after these three months, while we only had 2000 in accumulated depreciation. So our net book value is 40,000 at the end of the year. Alright, so notice this isn't too tough, but this is a way that teachers love to trick you because sometimes we just gloss over those dates when we're not paying close enough attention. All right. So why don't you guys practice some partial depreciation in the next couple of problems? Let's do that now?