Equipment was purchased by Noland Manufacturing on January 1, 2022, for $125,000.Noland's policy is to adjust its accounts at year-end.Which is the appropriate journal entry to record depreciation at year-end if the company expects to use equipment consistently for five years? In the choices below, as per convention, debits are listed first followed by credits.
A)Dr Depreciation Expense - Equipment $25,000 Cr Accumulated Depreciation - Equipment $25,000
B)Dr Accumulated Depreciation - Equipment $25,000 Cr Depreciation Expense - Equipment $25,000
C)Dr Depreciation Expense - Equipment $25,000 Cr Equipment $25,000
D)Dr Accumulated Depreciation - Equipment $25,000 Cr Equipment $25,000

Question

Quizplus · Accepted Answer

The correct entry is to debit Depreciation Expense and credit Accumulated Depreciation for the annual depreciation amount, which is $25,000 ($125,000/5 years).

Equipment Was Purchased by Noland Manufacturing on January 1, 2022