Question

Depreciation on equipment for the year is $3,480. Required: (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

See explanation section

Step-by-step explanation:

A) To record the journal entry of annual adjustments of depreciation on equipment -

Debit Depreciation expense - Equipment $3,480

Credit Accumulated depreciation $3,480

Note: As the depreciation expense $3,480 is for one year, the entire amount will be debited to adjust the expense.

B) To record the journal entry of monthly adjustments of depreciation on equipment -

Debit Depreciation expense - Equipment $290

Credit Accumulated depreciation $290

Note: As the depreciation expense $3,480 is for one year, the monthly expense is = $(3,480/12) = $290 amount will be debited to adjust the expense for each month.