If a fixed asset, such as a computer, were purchased on January 1st for $3,750 with an estimated life of 3 years and a salvage or residual value of $150, the journal entry for monthly expense under straight-line depreciation is:
(Note: EOM indicates the last day of each month.)
A) EOM Depreciation Expense$\quad$100
Accumulated Depreciation$\quad$100

B)EOM Depreciation Expense $\quad 1,200$
Accumulated Depreciation$\quad$1,200

C) EOM Accumulated Depreciation$\quad$1,200
Depreciation Expense$\quad$1,200

D)EOM Accumulated Depreciation$\quad$100
Depreciation Expense$\quad$100

Question

If a fixed asset, such as a computer, were purchased on January 1st for $3,750 with an estimated life of 3 years and a salvage or residual value of $150, the journal entry for monthly expense under straight-line depreciation is:
(Note: EOM indicates the last day of each month.)
A) EOM Depreciation Expense$\quad$100
Accumulated Depreciation$\quad$100

B)EOM Depreciation Expense $\quad 1,200$
Accumulated Depreciation$\quad$1,200

C) EOM Accumulated Depreciation$\quad$1,200
Depreciation Expense$\quad$1,200

D)EOM Accumulated Depreciation$\quad$100
Depreciation Expense$\quad$100

Quizplus · Accepted Answer

The annual depreciation is calculated as $(3750 - 150) / 3 = 1200$. The monthly depreciation expense is $1200 / 12 = 100$. Therefore, the correct journal entry is to debit Depreciation Expense and credit Accumulated Depreciation by $100 each month.

If a Fixed Asset, Such as a Computer, Were Purchased \quad

If a Fixed Asset, Such as a Computer, Were Purchased $\quad$