A business purchased equipment for $125,000 on January 1 of the current year. The equipment will be depreciated over the five years of its estimated useful life using the straight−line depreciation method. The business records depreciation once a year on December 31. Which of the following is the adjusting entry required to record depreciation on the equipment for the end of the first year? (Assume the residual value of the acquired equipment to be zero.) A. Debit $25,000 to Depreciation Expense—Equipment, and credit $25,000 to Accumulated Depreciation—Equipment. B. Debit $125,000 to Depreciation Expense—Equipment, and credit $125,000 to Accumulated Depreciation—Equipment. C. Debit $25,000 to Depreciation Expense, and credit $25,000 to Equipment. D. Debit $125,000 to Equipment, and credit $125,000 to Cash.
A business purchased equipment for $125,000 on January 1 of the current year. The equipment will be depreciated over the five years of its estimated useful life using the straight−line depreciation method. The business records depreciation once a year on December 31. Which of the following is the adjusting entry required to record depreciation on the equipment for the end of the first year? (Assume the residual value of the acquired equipment to be zero.) A. Debit $25,000 to Depreciation Expense—Equipment, and credit $25,000 to Accumulated Depreciation—Equipment. B. Debit $125,000 to Depreciation Expense—Equipment, and credit $125,000 to Accumulated Depreciation—Equipment. C. Debit $25,000 to Depreciation Expense, and credit $25,000 to Equipment. D. Debit $125,000 to Equipment, and credit $125,000 to Cash.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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A business purchased equipment for
depreciated over the five years of its estimated useful life using the
straight−line
depreciation method. The business records depreciation once a year on December 31. Which of the following is the adjusting entry required to record depreciation on the equipment for the end of the first year? (Assume the residual value of the acquired equipment to be zero.)
$125,000
on January 1 of the current year. The equipment will be Debit
Accumulated
$25,000
to Depreciation
Expense—Equipment,
and credit
$25,000
to Depreciation—Equipment.
Debit
$125,000
to Depreciation
Expense—Equipment,
and credit
$125,000
to Accumulated
Depreciation—Equipment.
Debit
$25,000
to Depreciation Expense, and credit
$25,000
to Equipment. Debit
$125,000
to Equipment, and credit
$125,000
to Cash.Expert Solution
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