B3: 3.07 Depreciation journals

Depreciation journals

In the previous section we saw how an asset’s depreciation can be calculated. We shall now look at how it is then recorded in the General Ledger.

The basic journal used to record depreciation is shown below:

Depreciation expense£X,XXX
Accumulated depreciation£X,XXX
Depreciation journal

Each class of asset will have its own Depreciation expense and Accumulated depreciation accounts; e.g. a Machinery depreciation expense account and a Machinery accumulated depreciation expense.

A bookkeeper or accountant could post journals to record each asset’s depreciation separately but due to the time involved they would normally calculate the total depreciation for each asset class and then post the totals.


A business depreciates its two machines at a rate of 15% per year on a diminishing balance basis. The first machine cost £600,000 and and at the start of the year, accumulated depreciation of £166,650 had been charged against the asset. Its second machine cost £100,000 and accumulated depreciation at the start of the year was £15,000.

The depreciation to be charged against the two machines would be calculated as follows:

Machine 1: (600,000 – 166,650) x 15% = £65,025

Machine 2: (100,000 – 15,000) x 15% = £12,750

Total depreciation on machinery: £65,025 + £12,750 = £77,775

The depreciation journal for machinery is shown below:

Machinery depreciation expense£77,775
Machinery accumulated depreciation£77,775
Depreciation of machinery for the year

The entries in the ledger accounts are: