Ironclad Manufacturing purchased equipment and depreciates it using the double-declining-balance method. The equipment cost $100,000, has a 5-year useful life and a $10,000 residual value.
| Date | Event |
|---|
| January 1, 2025 | Purchased the equipment for cash. |
| December 31, 2025 | Recorded depreciation for the first year. |
| December 31, 2026 | Recorded depreciation for the second year. |
| December 31, 2027 | Recorded depreciation for the third year. |
Required: Prepare the purchase entry and the depreciation entries for 2025–2027. The DDB rate is 2 ÷ 5 = 40%, applied each year to the beginning-of-year carrying amount (ignore residual value until the final years).