In 2021, StartUp Inc. (SU)set up a new manufacturing facility in Manitoba. To encourage SU to set up its factory, the province provided equipment with a fair market value of $45,000 and an estimated useful life of 5 years using straight-line depreciation. What journal entry would be required in fiscal 2022, if the net method is used?
A)No entry is required.
B)A credit to other comprehensive income - donated assets of $9,000.
C)A credit to deferred income of $9,000.
D)A credit to accumulated depreciation for $9,000.

Question

Quizplus · Accepted Answer

The Answer of In 2021, StartUp Inc. (SU)set up a new manufacturing facility in Manitoba. To encourage SU to set up its factory, the province provided equipment with a fair market value of $45,000 and an estimated useful life of 5 years using straight-line depreciation. What journal entry would be required in fiscal 2022, if the net method is used?
A)No entry is required.
B)A credit to other comprehensive income - donated assets of $9,000.
C)A credit to deferred income of $9,000.
D)A credit to accumulated depreciation for $9,000.