Question

On December 1, delivery equipment was purchased for $6,144. The delivery equipment has an estimated useful life of four years (48 months) and no salvage value. Using the straight-line depreciation method, analyze the necessary adjusting entry as of December 31 (one month) using T accounts, and then formally enter this adjustment in the general journal.

Answer 1

Answer and Explanation:

The presentation is shown below;

Depreciation expense

Adjustment $128 ($6,144 ÷ 48 months)

Accumulated depreciation

Adjustment $128

The journal entry is

Depreciation expense $128

To Accumulated depreciation $128

(Being depreciation expense is recorded)

Here the depreciation expense is debited as it increased the expense and credited the accumulated depreciation as it decreased the asset