Concept #1: Adjusting Journal Entries: Depreciation (First Year)
Concept #2: Adjusting Journal Entries: Depreciation (Second Year)
Practice: On January 1, Super Car Wash purchases a brand new auto-washing machine on account for $40,000. The company expects the machine to last eight years. The company chose the “straight-line” method to depreciate the asset, expecting no salvage value. The adjusting entry at the end of the first year would include:
Practice: What will be the book value of the asset after two years?
Practice: On January 1, 1989 XYX Company purchased a machine for $180,000 in cash. The company estimated a nine year useful life with no salvage value. After the correct entries are made, what will be the balance in the Accumulated Depreciation account on December 31, 1992?