The Harris Company purchased equipment for $15,000 on December 1.It is estimated that annual depreciation on the computer will be $3,000.If financial statements are to be prepared on December 31, the company should make the following adjusting entry:
A)debit Depreciation Expense, $3,000; credit Accumulated Depreciation, $3,000.
B)debit Depreciation Expense, $250; credit Accumulated Depreciation, $250.
C)debit Depreciation Expense, $12,000; credit Accumulated Depreciation, $12,000.
D)debit Equipment, $15,000; credit Accumulated Depreciation, $15,000.

Question

Quizplus · Accepted Answer

The equipment was purchased on December 1, and the financial statements are prepared on December 31, so only one month's depreciation needs to be recorded. The annual depreciation is $3,000, so the monthly depreciation is $3,000 / 12 = $250.

The Harris Company Purchased Equipment for $15,000 on December 1