Homework Answers
Cost of equipment = $72,000
Useful life = 4 years
Annual depreciation expense = Cost of equipment/Useful life
= 72,000/4
= $18,000
Depreciation expense for 3 months (Oct 1, 2021 to Dec 31, 2021) = 18,000 x 3/12
= $4,500
Hence, the following adjusting entry will be made on Dec 31, 2021
Journal
|
Date |
Account Title and Explanation |
Debit |
Credit |
| Dec 31, 2021 | Depreciation expense | 4,500 | |
| Accumulated depreciation - Equipment | 4.500 | ||
| (To record depreciation expense at the year end) |
Fourth option is the correct option.
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