Question

Beaver Construction purchases new equipment for $25,800 cash on April 1, 2021. At the time of purchase, the equipment is expected to be used in operations for five years (60 months) and have no resale or scrap value at the end. Beaver depreciates equipment evenly over the 60 months ($430/month). Required: 1.&2. Record the necessary entries in the Journal Entry Worksheet below. 3. Calculate the year-end adjusted balances of Accumulated Depreciation and Depreciation Expense (assuming the balance of Accumulated Depreciation at the beginning of 2021 is $0). Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Required 1 and 2 Required 3 Record the necessary entries in the Journal Entry Worksheet below. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.) No Date General Journal Credit Debit 25,800 1 April 01 Equipment Cash 25,800 December 31 5,160 X Depreciation Expense Accumulated Depreciation 5,160 x < Required 1 and 2 Required 3 >

Answer 1

Solution

Depreciation expense will be $3870 instead of 5160.

$5160 is for the complete year. The equipment is purchased on April 1 so only 9 Month's depreciation will be recorded.......(5160/12 x 9)

Date	Accounts title	Debit	Credit
April 1	Equipment	$ 25,800
	Cash		$ 25,800
	(To record purchase of Equipment)
Dec 31	Depreciation expense	$ 3,870
	Accumulated Depreciation		$ 3,870
	(Depreciation expense recorded)