On January 2, 2004 a Repair Cost of $2,000 Was

On January 2, 2004 a repair cost of $2,000 was incorrectly debited to the equipment account. Equipment is being depreciated on a straight-line basis over a 10-year life with salvage value of 10 percent. The correcting entry for the calendar year end company, on January 20, 2007 (the date the error was discovered, after closing entries had been recorded for 2006) would include a:

A) credit to accumulated depreciation for $1,080.
B) credit to retained earnings for $2,000.
C) debit to equipment for $2,000.
D) debit to retained earnings for $1,460.