Help me selecting the right answer. Thank you **Depreciation Expense for Equipment: Units-of-Production Method**On January 1, 2025, a company acquired equipment for $190,000. The estimated residual value of the equipment is $20,000. The equipment has a total capacity of 50,000 machine hours over its useful life of four years. The actual usage recorded for the first year stands at 3,000 hours. What is the journal entry for the depreciation expense for the first year calculated using the units-of-production method?**Journal Entry Options:**1. **Option 1:** - Accumulated Depreciation - Equipment: $10,200 - Depreciation Expense - Equipment: $10,2002. **Option 2:** - Depreciation Expense - Equipment: $50,000 - Accumulated Depreciation - Equipment: $50,0003. **Option 3:** - Depreciation Expense - Equipment: $10,200 - Accumulated Depreciation - Equipment: $10,2004. **Option 4:** - Accumulated Depreciation - Equipment: $50,000 - Depreciation Expense - Equipment: $50,000**Explanation:**To calculate depreciation using the units-of-production method, determine the depreciation per unit by dividing the depreciable base by the total estimated production capacity.- **Depreciable Base:** $190,000 - $20,000 = $170,000- **Depreciation per Hour:** $170,000 / 50,000 hours = $3.40 per hour- **Depreciation for the Year:** $3.40 per hour * 3,000 hours = $10,200The correct journal entry will debit the Depreciation Expense - Equipment account and credit the Accumulated Depreciation - Equipment account for $10,200. Therefore, the third option reflects the correct entry.

Name: Help me selecting the right answer. Thank you **Depreciation Expense f
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Description: Help me selecting the right answer. Thank you **Depreciation Expense for Equipment: Units-of-Production Method**On January 1, 2025, a company acquired equipment for $190,000. The estimated residual value of the equipment is $20,000. The equipment has

The question is based on the concept of Depreciation Accounting. Depreciation is the decrease in the…

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Accounting

On January 1, 2025, a company acquired equipment for $190,000. Residual value was estimated to be $20,000. The equipment can be used 50,000 machine hours or a useful life of four years. Actual usage of the equipment was recorded as 3,000 hours for the first year. What is the journal entry for depreciation expense for the first year calculated by the units-of-production method? O Accumulated Depreciation - Equipment Depreciation Expense - Equipment O Depreciation Expense - Equipment Accumulated Depreciation - Equipment O Depreciation Expense - Equipment Accumulated Depreciation - Equipment O Accumulated Depreciation - Equipment 10,200 50,000 10,200 50,000 10,200 50,000 10,200