Dorchester Museum purchased a computer for $3,600 on December 1. It is estimated that the useful life of the computer will be 3 years. If financial statements are to be prepared on December 31, the company should make the following adjusting entry
A) debit Depreciation Expense, $100; credit Computer, $100.
B) debit Depreciation Expense, $100; credit Accumulated Depreciation, $100.
C) debit Depreciation Expense, $1,200; credit Accumulated Depreciation, $1,200.
D) debit Cash, $100; credit Accumulated Depreciation, $100.

Question

Quizplus · Accepted Answer

The correct adjusting entry for recording depreciation involves debiting Depreciation Expense and crediting Accumulated Depreciation. The amount for one month (December) is $100, calculated as $3,600 (cost) / 36 months (3 years) = $100 per month.

Dorchester Museum Purchased a Computer for $3,600 on December 1