Question

eBook Print Question 1 Not complete Marked out of 3.00 P Flag question Adjusting Entry for Depreciation Cowley Company just completed its first year of operations. The December 31 equipment account has a balance of $10,000. There is no balance in the Accumulated Depreciation Equipment account or in the Depreciation Expense account. The accountant estimates the yearly equipment depreciation to be $2,000. Prepare the required adjusting entry to record the yearly depreciation for equipment. Debit Credit General Journal Description Accumulated depreciation - equipment Accumulated depreciation - equipment 0 0 Check A Save Answers Next >

Answer 1

Solution:

Particulars	Debit	Credit
Depreciation expense	2,000
Accumulated depreciation - Equipment		2,000

Explanation: The adjusting entry for recording the yearly depreciation on equipment will be debiting the Depreciation Expense account (reflected in the income statement) and crediting of Accumulated Depreciation - Equipment account (reflected in the balance sheet as a contra account that decreases the fixed assets amount).