The company purchases equipment for 18000 on March 2017 The

The company purchases equipment for $18,000 on March, 2017. The equipment will be useful for 3 years. The company records an adjusting entry for depreciation at the end of each year. Please record adjusting entry

Solution

Adjusting entry for depriciation at the end of each year-

Depriciation expense account Dr

To Accumulated Depriciation Account

EXPLANATION-

1. Depriciation is an expense, so it is debit account and accumulated depriciation balance increases each year and it is a contra asset account, so it is credited.

2. Accumulated depriciation is a cumulative balance of depriciation charged in all previous years regarding the asset.