Answer:
The correct answer is C
Explanation:
The amount of depreciation expense is computed using the SLM (stands for Straight Line Method) as:
Depreciation expense = Cost of machine - Residual value / Number of life years
where
Cost of machine is $980,000
Residual value is $0
Number of life years is 7 years
Putting the value above:
Depreciation expense = $980,000 - $0 / 7
= $980,000 / 7
= $140,000
The entry which is to be recorded as:
Depreciation Expense A/c.....................Dr $140,000
Accumulated Depreciation A/c.............Cr $140,000
