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8 March, 18:58

If a fixed asset, such as a computer, were purchased on January 1st for $1,832.00 with an estimated life of 6 years and a salvage or residual value of $123.00, what is the journal entry for monthly expense under straight-line depreciation?

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  1. 8 March, 19:49
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    Dr depreciation expense $ 23.74

    Cr accumulated depreciation $ 23.74

    Explanation:

    The depreciation per month would be first thing to determine:

    Yearly depreciation = Cost of asset-residual value/useful life

    cost of asset is $1,832.00

    residual value which is disposal value at the end of useful life is $123.00

    Useful life is 6 years

    yearly depreciation charge = ($1,832.00-$123.00) / 6=$ 284.83

    Monthly depreciation expense=yearly depreciation charge/12=$284.83/12=$23.74

    The journal entry monthly would be a debit to depreciation expense and a credit to accumulated depreciation
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