A machine is purchased and used throughout its predicted useful life of five years.The depreciable cost equals $50,000.The company uses the straight-line method.How would the company record the adjusting entry to record the depreciation on this machine at the end of each of the years in its useful life?
A)Debit Machinery for $50,000 and credit Cash for $50,000.
B)Debit Machinery Expense for $10,000 and credit Machinery for $10,000.
C)Debit Depreciation Expense for $10,000 and credit Accumulated Depreciation-Machinery for $10,000.
D)Debit Accumulated Depreciation-Machinery for $10,000 and credit Depreciation Expense for $10,000.
E)Debit Depreciation Expense for $10,000 and credit Machinery for $10,000.

Question

Quizplus · Accepted Answer

The adjusting entry to record the depreciation on the machine at the end of each year would be to debit Depreciation Expense for $10,000 and credit Accumulated Depreciation-Machinery for $10,000. This is because the straight-line method evenly distributes the depreciable cost over the useful life of the machine, resulting in an annual depreciation expense of $10,000. Accumulated Depreciation-Machinery is a contra-asset account that keeps track of the total amount of depreciation taken on the machine since it was put into use. Over its five-year useful life, the machine would be depreciated for a total of $50,000, which would be recorded as a credit to Accumulated Depreciation-Machinery.

A Machine Is Purchased and Used Throughout Its Predicted Useful