A business acquired equipment for $150,000 on January 1, 2015. The equipment wil

Question

A business acquired equipment for $150,000 on January 1, 2015. The equipment will be depreciated over five years of its 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 equipment for the year 2015? (Assume the salvage value of the acquired equipment to be zero.) Debit $150,000 to Depreciation Expense and credit $150,000 to Accumulated Depreciation. Debit $30,000 to Depreciation Expense and credit $30,000 to Accumulated Depreciation. Debit $150,000 to Equipment and credit $150,000 to Cash. Debit S30,000 to Depreciation Expense and credit $30,000 to Equipment.

Explanation / Answer

Entry will be as follows

Depreciation Expenses A/c Dr. $30000

To Accumulated Depreciation A/c $30000

Thus, Debit $30000 to depreciation expense and credit $30000 to accumulated depreciation.

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