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Suppose on December 31, Hipzone Inc. needs to record depreciation on a piece of office equipment....

Suppose on December 31, Hipzone Inc. needs to record depreciation on a piece of office equipment. The equipment was purchased on 1/1/2010 for $2,000, was expected to last 10 years at the time of purchase, and had an expected salvage value of $200. No depreciation has been recorded on the equipment for 2013. Make ALL of the entries required by this transaction.

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Answer #1

Note :Since no mention is there, it is assumed to be straight line method of depreciation

Depreciation expense = [2000 -200] / 10 = 180

Account title Debit Credit
Income summary 180
Depreciation expense -equipment 180
Depreciation expense 180
Accumulated Depreciation - equipment 180
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