On October 1, 2021, a company purchases equipment for $72,000. The equipment is expected to be used for the next four years (48 months)

On October 1, 2021, a company purchases equipment for $72,000. The equipment is expected to be used for the next four years (48 months). What adjusting entry should the company record on December 31, 2022?

A) Debit Depreciation Expense and credit Accumulated Depreciation for $13,500.

B) Debit Depreciation Expense and credit Accumulated Depreciation for $18,000.

C) Debit Depreciation Expense and credit Accumulated Depreciation for $22,500.

D) Debit Depreciation Expense and credit Accumulated Depreciation for $4,500.

Answer: B

On October 1, 2021, a company purchases equipment for $72,000. The equipment is expected to be used for the next four years (48 months). What adjusting entry should the company record on December 31, 2021?

A) Debit Depreciation Expense and credit Cash for $72,000.

B) Debit Depreciation Expense and credit Accumulated Depreciation for $72,000.

C) Debit Equipment and credit Depreciation Expense for $4,500.

D) Debit Depreciation Expense and credit Accumulated Depreciation for $4,500.

Answer: D