Tina's Event Planning bought a computer worth $3,500 with an expected life of 5 years and a residual value of $750.What is the adjusting journal entry after the first year?
A)
$$\begin{array} { | c | l | }
\hline \text { Computer } & 550 \
\hline \text { Depreciation Expense } & 550 \
\hline
\end{array}$$
B) $$\begin{array} { | c | l | }
\hline \text { Computer } & 550 \
\hline \text { Accumulated Depreciation, Computer } & 550 \
\hline
\end{array}$$
C) $$\begin{array} { | c | l | }
\hline \text { Depreciation Expense } & 550 \
\hline \text { Accumulated Depreciation, Computer } & 550 \
\hline
\end{array}$$
D)
$$\begin{array} { | c | l | }
\hline \text {Depreciation Expense} & 550 \
\hline \text { Computer} & 550 \
\hline
\end{array}$$

Question

Tina's Event Planning bought a computer worth $3,500 with an expected life of 5 years and a residual value of $750.What is the adjusting journal entry after the first year?
A) 
$$\begin{array} { | c | l | } 
\hline \text {  Computer  } & 550 \
\hline \text { Depreciation Expense } & 550 \
\hline
\end{array}$$
B) $$\begin{array} { | c | l | } 
\hline \text { Computer } & 550 \
\hline \text { Accumulated Depreciation, Computer } & 550 \
\hline
\end{array}$$
C) $$\begin{array} { | c | l | } 
\hline \text { Depreciation Expense } & 550 \
\hline \text { Accumulated Depreciation, Computer } & 550 \
\hline
\end{array}$$
D) 
$$\begin{array} { | c | l | } 
\hline \text {Depreciation Expense} & 550 \
\hline \text { Computer} & 550 \
\hline
\end{array}$$

Quizplus · Accepted Answer

The adjusting journal entry after the first year should record one year's worth of depreciation. Since the computer has a useful life of 5 years, the depreciation expense for each year is calculated as:

Depreciation Expense = (Cost of Asset - Residual Value) / Useful Life
Depreciation Expense = ($3500 - $750) / 5
Depreciation Expense = $550

The adjusting journal entry to record this depreciation expense would be to debit Depreciation Expense and credit Accumulated Depreciation, Computer for $550 each. Option C is the only choice that reflects this correct entry.

Tina's Event Planning Bought a Computer Worth $3,500 with an Expected