On September 1, a company purchased equipment for $25,000. The equipment's estimated
salvage value is $2,500. The machine will be depreciated using straight-line depreciation and a five
year life. If the company prepares annual financial statements on December 31, the appropriate
adjusting journal entry to make on December 31 of the first year would be a
$1,500 debit to Depreciation Expense and a $1,500 credit to Accumulated Depreciation.
$4,500 debit to Depreciation Expense and a $4,500 credit to Accumulated Depreciation.
$1,500 debit to Accumulated Depreciation and a $1,500 credit to Depreciation Expense.
$4,500 debit to Accumulated Depreciation and a $4,500 credit to Depreciation Expense.
$1,500 debit to Depreciation Expense and a $1,500 credit to Cash.