You purchased a truck March 1st for $17,000. The salvage value is $5,000 and the expected useful life is 5 years. What would the entry be for the end of the year accounting cycle on June 30th?
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You purchased a truck March 1st for $17,000. The salvage value is $5,000 and the expected useful life is 5 years. What would the entry be for the end of the year accounting cycle on June 30th?
Your journal entry will be an adjusting entry for depreciation.
You have to calculate 4 months of depreciation: Cost - Salvage value * number of months/12 months (if you are using Straight Line Method of Depreciation).
The entry will be:
Debit Depreciation Expnese for the amount calculated above
Credit Accumulated Depreciation for the amount calculated above.
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