Question

Suppose your company sells services of $180 in exchange for $135 cash and $45 on account. Depreciation of $65 relating to equipment also is recorded. Record the depreciation expense of $65.

Answer 1

Explanation:

To record the depreciation expense of $65, you would make the following journal entry:

Depreciation Expense $65

Accumulated Depreciation $65

This entry reflects the decrease in the value of the equipment (Depreciation Expense) and accumulates the total depreciation over time (Accumulated Depreciation). This assumes you are using the straight-line method of depreciation.