Franchise rights were purchased for $250,000 and contain the rights to operate for a 25 year period. Which of the following is the correct journal entry to record the annual franchise right expense? Debit Depreciation Expense 10,000 Credit Accumulated Depreciation 10,000 Debit Accumulated Amortization 10,000 Credit Amortization Expense 10,000 Debit Amortization Expense 10,000 Credit Accumulated Amortization 10,000 Debit Accumulated Depreciation 10,000 Credit Depreciation Expense 10,000

Franchise rights were purchased for $250,000 and contain the rights to operate for a 25 year period. Which of the following is the correct journal entry to record the annual franchise right expense? Debit Depreciation Expense 10,000 Credit Accumulated Depreciation 10,000 Debit Accumulated Amortization 10,000 Credit Amortization Expense 10,000 Debit Amortization Expense 10,000 Credit Accumulated Amortization 10,000 Debit Accumulated Depreciation 10,000 Credit Depreciation Expense 10,000

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Description: Franchise rights were purchased for $250,000 and contain the rightsto operate for a 25 year period. Which of the following is the correctjournal entry to record the annual franchise right expense?Debit Depreciation Expense 10,000Credit Accumulated D

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Depreciation Methods

The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.

Depreciation Accounting

In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.

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Question

Franchise rights were purchased for $250,000 and contain the rights
to operate for a 25 year period. Which of the following is the correct
journal entry to record the annual franchise right expense?
Debit Depreciation Expense 10,000
Credit Accumulated Depreciation 10,000
Debit Accumulated Amortization 10,000
Credit Amortization Expense 10,000
Debit Amortization Expense 10,000
Credit Accumulated Amortization 10,000
Debit Accumulated Depreciation 10,000
Credit Depreciation Expense 10,000

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