On January 1, 2025, a corporation acquired equipment for $160,000. Residual value was estimated to be $25,000. The equipment can be used 85,000 machine hours or a useful life of four years Actual usage of the equipment was recorded as 8,000 hours for the first year. What is the journal entry for depreciation expense for the first year calculated by the straight-line method? OA Depreciation Expense Equipment Accumulated Depreciation - Equipment OB. Depreciation Expense- Equipment Accumulated Depreciation Equipment OC. Accumulated Depreciation Equipment Depreciation Expense - Equipment OD. Accumulated Depreciation Equipment Depreciation Expense- Equipment 40,000 33,750 33,750 40,000 40,000 33,750 33,750 40,000 COD
On January 1, 2025, a corporation acquired equipment for $160,000. Residual value was estimated to be $25,000. The equipment can be used 85,000 machine hours or a useful life of four years Actual usage of the equipment was recorded as 8,000 hours for the first year. What is the journal entry for depreciation expense for the first year calculated by the straight-line method? OA Depreciation Expense Equipment Accumulated Depreciation - Equipment OB. Depreciation Expense- Equipment Accumulated Depreciation Equipment OC. Accumulated Depreciation Equipment Depreciation Expense - Equipment OD. Accumulated Depreciation Equipment Depreciation Expense- Equipment 40,000 33,750 33,750 40,000 40,000 33,750 33,750 40,000 COD
Chapter1: Financial Statements And Business Decisions
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Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
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Transcribed Image Text:On January 1, 2025, a corporation acquired equipment for $160,000. Residual value was estimated to be $25,000. The equipment can be used 85,000 machine hours or a useful life of four years
Actual usage of the equipment was recorded as 8,000 hours for the first year. What is the joumal entry for depreciation expense for the first year calculated by the straight-line method?
OA Depreciation Expense Equipment
Accumulated Depreciation Equipment
OB. Depreciation Expense Equipment
Accumulated Depreciation Equipment
OC. Accumulated Depreciation Equipment
Depreciation Expense- Equipment
OD. Accumulated Depreciation Equipment
Depreciation Expense- Equipment
40,000
33,750
33,750
40,000
40,000
33,750
33,750
40,000
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