Answer:
Explanation:
Before preparing the journal entry, we need to do some calculations which are shown below:
The computation of the depreciation expense under the straight line method is shown below:
= (Original cost - residual value) ÷ (useful life)
= ($61,800 - $4,120) ÷ (8 years)
= ($57,680) ÷ (8 years)
= $7,210
In this method, the depreciation is same for all the remaining useful life
The net book value would be
= Original cost - depreciation expense × number of years
= $61,800 - $7,210 × 5
= $61,800 - $36,050
= $25,750
Now the accumulated depreciation would be
= (Net book value - salvage value) ÷ number of years
= ($25,750 - $4,635) ÷ 5 years
= $4,223
The journal entry would be
Depreciation expense A/c Dr $4,223
To Accumulated depreciation A/c $4,223
(Being the accumulated depreciation is recorded)
