The estimated amount of depreciation on equipment for the current year is $2,150. Journalize the adjusting entry to record the depreciation.
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.
The estimated amount of
Adjusting journal entry: At year end when company finalise its accounts then any unrecognized income or expenses for the period is adjsuted in accounts by adjusting entry at the end of accounting period.
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