Question

Depreciation on equipment for the year is $6,300. (a) Record the journal entry if the company prepares adjustments once a year. (b) Record the journal entry if the company prepares adjustments on a monthly basis.

Answer 1

Explanation:

The journal entries are shown below:

a.

Depreciation Expense A/c Dr $6,300

          To Accumulated Depreciation - Equipment A/c $6,300

(Being depreciation expense is recorded)      

b.

Depreciation Expense A/c Dr $525              ($6,300 ÷ 12 months)

            To Accumulated Depreciation - Equipment A/c $525

(Being the monthly depreciation expense is recorded)