Question

onslow company purchased a used machine for $192,000 cash on january 2. on january 3, onslow paid $6,000 to wire electricity to the machine. onslow paid an additional $1,200 on january 4 to secure the machine for operation. the machine will be used for six years and have a $23,040 salvage value. straight - line depreciation is used. on december 31, at the end of its fifth year in operations, it is disposed of. problem 10 - 6a (algo) part 2 2. prepare journal entries to record depreciation of the machine at december 31. view transaction list journal entry worksheet 1 2 record the first year year - end adjusting entry for the depreciation expense of the used machine. note: enter debits before credits.

Explanation:

Step1: Calculate the total cost of the machine

The total cost includes the purchase price, wiring - cost, and securing - cost. So, the total cost $C = 192000+6000 + 1200=199200$.

Step2: Calculate the depreciable cost

The depreciable cost $D$ is the total cost minus the salvage value. So, $D = 199200 - 23040=176160$.

Step3: Calculate the annual depreciation expense

Using the straight - line depreciation method, the annual depreciation expense $A$ is the depreciable cost divided by the useful life. The useful life is 6 years. So, $A=\frac{176160}{6}=29360$.

Step4: Record the journal entry

The journal entry to record the depreciation expense is to debit Depreciation Expense and credit Accumulated Depreciation - Machine.
Debit: Depreciation Expense - Machine 29360
Credit: Accumulated Depreciation - Machine 29360

Answer:

Debit: Depreciation Expense - Machine 29360
Credit: Accumulated Depreciation - Machine 29360