🏢Depreciation
Depreciation Adjusting Entry (Straight-Line)
Record periodic depreciation expense for fixed assets.
Scenario
Equipment cost $48,000, salvage $6,000, useful life 7 years. Record monthly depreciation.
Journal Entries
Monthly depreciation = (48,000-6,000)/84 = $500.
| Account | Debit | Credit |
|---|---|---|
| Depreciation Expense | $500 | |
| Accumulated Depreciation | $500 |
Explanation
Depreciation allocates asset cost over useful life while preserving original asset cost on books.
Variations
Annual entry possible if policy uses annual closes.
Common Mistakes to Avoid
- ✗Crediting asset directly instead of accumulated depreciation.
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Common questions about this journal entry
It preserves gross asset cost and shows contra-asset balance.
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