The Rose Bakery purchased a computer for $4,000 on December 1.It is estimated that annual depreciation on the computer will be $800.If financial statements are to be prepared on December 31, the company should make the following adjusting entry:

Question

Quizplus · Accepted Answer

The adjusting entry should recognize the current year's depreciation expense by debiting Depreciation Expense and credited Accumulated Depreciation for the same amount. Since the computer was purchased on December 1, only one month worth of depreciation expense, or $800, should be recognized. Option A correctly reflects this entry. Option B is incorrect because it uses an incorrect calculation for depreciation expense. Option C is incorrect because it assumes the full cost of the computer is recorded as an expense in the current period, which is not accurate. Option D is incorrect because it assumes an incorrect account to debit.

The Rose Bakery Purchased a Computer for $4,000 on December