How to depreciate fixed assets? For example, my company has an excavator valued at $2.6 million with an estimated useful life of 5 years, how do I depreciate it? After you raise it

Annual Depreciation Rate=(1-5%)/5=19%

Monthly Depreciation Rate=19%/12=1.58%

Monthly Depreciation=2,600,000*1.58%=41,080

Accruing Accumulated Depreciation

Borrow Overhead Expense or Manufacturing Expense 41080 Credit Accumulated Depreciation 41080

When you dispose of the fixed assets after 5 years

Borrow:Fixed Assets Liquidation 135200 Accumulated Depreciation 2464800 Credit:Fixed Assets 2600000

When you receive the liquidation payment, it is credited to

Debit Bank Deposits 2600000 Credit Fixed Assets Liquidation 2600000<