Prepare journal entries for the following transactions for the current year Note: Use 360 days a year. April 25 Accepted a $9,000, 90-day, 10% note from a customer in granting a time extension on its past-due account receivable. June 24 The customer dishonored the note. Journal Entry 1 Record receipt of note on account. Journal Entry 2 Record the maturity value of customer dishonored the note.
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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