Newco publishing company purchase equipment at the beginning of 2014 for $200,00
ID: 2493345 • Letter: N
Question
Newco publishing company purchase equipment at the beginning of 2014 for $200,000. The company decided to depreciate the equipment over an 8 year period using the straight line method. The company estimated the equipment's residual value at $20,000. The journal entry to record depreciation expense for 2014 will. ..........a.Increase depreciation expense and increase accumulated depreciation for $25,000 b.increase depreciation expense and increase accumulated depreciation $22,500 c.increase accumulated depreciation and decrease equipment for $25,000 d.increase depreciation expense and decrease equipment for $22,500
Explanation / Answer
Solution.
Journal entry for depreciation.
d.increase depreciation expense and decrease equipment for $22,500.
Depreciation on fixed assets is the loss of business, and every loss will be debited.
There is a decrease in asset and we will apply what goes from business on it. So, Machinery (Fixed asset) account will be credited.