A company depreciates its equipment $500 a year. The adjusting entry on December 31 is a debit to Depreciation Expense of $500 and a credit to Equipment of $500.

Name: A company depreciates its equipment $500 a year. The adjusting entry on December 31 is a debit to Depreciation Expense of $500 and a credit to Equipment of $500.
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Question

Quizplus · Accepted Answer

The correct adjusting entry is a debit to Depreciation Expense of $500 and a credit to Accumulated Depreciation of $500, not directly to the Equipment account.

A Company Depreciates Its Equipment $500 a Year