Oscar is a self-employed electrician. He purchases a piece of equipment for $30,000 cash. He plans to use it for 10 years, at which point he plans to sell it for approximately $4,000. He elects to use the straight-line method of depreciation.
Prepare the journal entry for the above scenario.
Methods Of Depreciation:
Depreciation is the process of allocating a fixed asset's cost through an expense account for each year. All fixed assets, except for land, are required to be depreciated over its useful or service life. The journal entry to record depreciation is to debit Depreciation Expense and credit Accumulated Depreciation.
Answer and Explanation:
|Less: Salvage Value||4,000||(workback)|
|Divided by: Useful Life||10|
|Depreciation per year||$2,600|
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from Business 110: Business MathChapter 6 / Lesson 1