Question

Dexter Company purchases $ 30,000 of equipment on January 1, 2020. The equipment is expected to last five years and be worth $ 5,000 at the end of that time. Prepare the journal entry to record one year's depreciation expense of $ 5,000 for the equipment as of December 31, 2020

Answer 1

Dr Depreciation expense- Equipment $5,000

Cr Accumulated depreciation- Equipment $5,000

Step-by-step explanation:

Preparation of the journal entry to record one year's depreciation expense

Based on the information given we were told that the Company purchases Equipment at the amount of $ 30,000 in which the equipment is expected to last for five years and the Equipment will be worth the amount of $5,000.

Based on this the Appropriate journal entry to record one year's depreciation expense of the amount of $ 5,000 for the equipment as of December 31, 2020 will be :

Dr Depreciation expense- Equipment $5,000

Cr Accumulated depreciation- Equipment $5,000

Calculated as:

Depreciation Expense-Equipment= ($30,000 – $5,000) / 5 years

Depreciation Expense-Equipment= $15,000/5 years

Depreciation Expense-Equipment= $5,000