Hercules Company purchased a computer for $4,500 on December 1. It is estimated that annual depreciation on the computer will be $900. If financial statements are to be prepared on December 31, the company should make the following adjusting entry:
A) Debit Depreciation Expense, $900; Credit Accumulated Depreciation, $900.
B) Debit Depreciation Expense, $75; Credit Accumulated Depreciation, $75.
C) Debit Depreciation Expense, $3,600; Credit Accumulated Depreciation, $3,600.
D) Debit Office Equipment, $4,500; Credit Accumulated Depreciation, $4,500.

Question

Quizplus · Accepted Answer

The depreciation for one month (December) is calculated as $900 annual depreciation divided by 12 months, which equals $75. Therefore, the adjusting entry should reflect a $75 depreciation expense for December.

Hercules Company Purchased a Computer for $4,500 on December 1