If Hot Bagel Co.estimates depreciation on an automobile to be $578 for the year,the company should make the following adjusting entry:
A)Debit Accumulated Depreciation $578 and credit Depreciation Expense $578.
B)Debit Depreciation Expense $578 and credit Automobile $578.
C)Debit Depreciation Expense $578 and credit Accumulated Depreciation $578.
D)Debit Automobile $578 and credit Depreciation Expense $578.

Question

Quizplus · Accepted Answer

The adjusting entry should reflect the estimated depreciation expense for the year by debiting Depreciation Expense and crediting Accumulated Depreciation. This will increase the company's accumulated depreciation balance and expense for the year.