In 2009, Internal Auditors Discovered That Fay, Inc

In 2009, internal auditors discovered that Fay, Inc. had debited an expense account for the $700,000 cost of a machine purchased on January 1, 2006. The machine's useful life was expected to be 5 years with no residual value. Straight-line depreciation is used by Fay. The journal entry to correct the error will include a credit to accumulated depreciation of:

A) $140,000.
B) $280,000.
C) $420,000.
D) $700,000.During the three year period, depreciation expense was understated by $420,000, but other expenses were overstated by $700,000, so net income during the period was understated by $280,000, which means retained earnings is currently understated by that amount.During the three year period, accumulated depreciation was understated, and continues to be understated by $420,000.To correct incorrect accounts