Question

Onslow Co. purchases a used machine for $288,000 cash on January 2 and readies it for use the next day at a $8,000 cost. On January 3, it is installed on a required operating platform costing $1,600, and it is further readied for operations. The company predicts the machine will be used for six years and have a $34,560 salvage value. Depreciation is to be charged on a straight-line basis. On December 31, at the end of its fifth year in operations, it is disposed of.

• Record the first year year-end adjusting entry for the depreciation expense of the used machine.

Note: Enter debits before credits.

	Date General Journal Debit Credit Dec 31

Answer 1

Date	General Journal	Debit	Credit
Dec 31	Depreciation expense-Machinery	43840
	Accumulated Depreciation -Machinery		43840
	Workings:
	Cost of Machinery	297600	=288000+8000+1600
	Less: Salvage value	34560
	Depreciable cost	263040
	Divide by Useful life	6
	Depreciation expense-Machinery	43840