Answer:
Dr Depreciation expense- Equipment $5,000
Cr Accumulated depreciation- Equipment $5,000
Explanation:
Preparation of the journal entry to record one year's depreciation expense
Based on the information given we were told that the Company purchases Equipment at the amount of $ 30,000 in which the equipment is expected to last for five years and the Equipment will be worth the amount of $5,000.
Based on this the Appropriate journal entry to record one year's depreciation expense of the amount of $ 5,000 for the equipment as of December 31, 2020 will be :
Dr Depreciation expense- Equipment $5,000
Cr Accumulated depreciation- Equipment $5,000
Calculated as:
Depreciation Expense-Equipment= ($30,000 – $5,000) / 5 years
Depreciation Expense-Equipment= $15,000/5 years
Depreciation Expense-Equipment= $5,000
