Refer to Exhibit 22-2. what is the amount of the adjusting entry that should be made on January 1, 2019?
A) $6,000
B) $3,600
C) $2,400
D) $0

Question

Quizplus · Accepted Answer

The equipment was purchased on January 1, 2018, and has a useful life of 5 years. The adjusting entry on January 1, 2019, would be to record one year's depreciation expense, which is $12,000 / 5 = $2,400. However, the question states that the equipment was fully depreciated on December 31, 2018. This means that no further depreciation expense can be recorded for the equipment, so the adjusting entry on January 1, 2019, would be $0.