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At the end of its first year, the trial balance of Ivanhoe Company shows Equipment $30,600 and zero balances in Accumulated Depreciation—Equipment and Depreciation Expense. Depreciation for the year is estimated to be $3,620. Prepare the adjusting entry for depreciation at December 31. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.)

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Answer:

Dr Depreciation Expense $3,620

Cr Accumulated Depreciation-Equipment $3,620

Explanation:

Based on the information given we were told that the company had zero balances in both Accumulated Depreciation -Equipment as well as the Depreciation Expense in which the Depreciation amount for the year is estimated to be $3,620 which means that the adjusting entry for depreciation at December 31 will be recorded as:

Preparation of Journal entry

Dec. 31

Dr Depreciation Expense $3,620

Cr Accumulated Depreciation-Equipment $3,620

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