During 2011 and 2012, Faulkner Manufacturing used the sum-of-the-years-digits (SYD) technique of depreciation for its depreciable assets, for both tax purposes and financial reporting. At the starting of 2013, Faulkner decided to change to the straight-line method for both tax purposes and financial reporting. A tax rate of 40 percent is in effect for all years.

For an asset that cost $21,000 with an estimated residual value of $1,000 and an estimated useful life of 10 years, the depreciation under different methods is as given:

Year       Straight Line      SYD       Difference

2011       $2,000  $3,636  $1,636 

2012       2,000    3,273    1,273   

$4,000    $6,909  $2,909

1. Prepare the journal entry that Faulkner may record in 2013 related to the change. (If no entry is needed for a particular event, select "No journal entry required" in the first account field.)

2. Consider instead that Faulkner previously used straight-line depreciation and changed to sum-of-the-years- digits in 2013. Purpose the journal entry that Faulkner will record in 2013 related to the change.