The Sayonara Corporation purchased a notebook computer for $3,000 on December 1.The useful life of the notebook computer is estimated to be 5 years.If financial statements are to be prepared on December 31, the company should make the following adjusting entry:
A)debit Depreciation Expense, $600; credit Accumulated Depreciation, $600.
B)debit Depreciation Expense, $50; credit Accumulated Depreciation, $50.
C)debit Depreciation Expense, $2,400; credit Accumulated Depreciation, $2,400.
D)debit Office Equipment, $50; credit Accumulated Depreciation, $50.

Question

Quizplus · Accepted Answer

The adjusting entry for the end of the year would be to debit Depreciation Expense, $50 and credit Accumulated Depreciation, $50, using the straight-line method of depreciation. This is calculated by taking the cost of the asset ($3,000) and dividing it by the useful life (5 years), resulting in an annual depreciation expense of $600. Since the asset was purchased on December 1, there is only one month of use for the year, therefore the expense is calculated as $600/12 months = $50.

The Sayonara Corporation Purchased a Notebook Computer for $3,000 on December