Victory company purchases office equipment at the beginning of the year at a cost of $15,000. the machine is depreciated using the straight-line method. the machine's useful life is estimated to be 7 years with a $1,000 salvage value. the journal entry to record the first year's depreciation is:

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Business

Luz Chen

3 February, 09:19

Victory company purchases office equipment at the beginning of the year at a cost of $15,000. the machine is depreciated using the straight-line method. the machine's useful life is estimated to be 7 years with a $1,000 salvage value. the journal entry to record the first year's depreciation is:

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Edward Stanley · Answer 1

Over seven years, the depreciation is $14,000. Using the straight-line method, the depreciation is the same ever year, so the depreciation is $2,000 per year ($14,000 / 7 years). So the journal entry should show the first year's depreciation is $2,000 and replacement value is $13,000.