Question

Purchased a machine on December 7 for $24,000 cash. The machine has an estimated life of 4 years. Give the adjusting entry at December 31 for one month of depreciation. Use the straight-line method, and assume the asset will have no estimated salvage value?

Answer 1

The adjusting entry for one month of depreciation using the straight-line method is $500 for both Depreciation Expense and Accumulated Depreciation.

Step-by-step explanation:

The adjusting entry for one month of depreciation using the straight-line method can be calculated by dividing the cost of the machine by its estimated useful life. In this case, the cost of the machine is $24,000 and the estimated life is 4 years. Since there is no estimated salvage value, we can divide the cost by the number of months in the useful life. So, the monthly depreciation would be $24,000 / (4 * 12) = $500.Therefore, the adjusting entry for one month of depreciation on December 31 would be Depreciation Expense: $500Accumulated Depreciation: $500