At the end of its first year, the trial balance of Sheridan Company shows Equipment $22,300 and zero balances in Accumulated Depreciation-Equipment and Depreciation Expense. Depreciation for the year is estimated to be $3,500. Prepare the annual adjusting entry for depreciation at December 31

Depreciation expense $3,500

To Accumulated depreciation $3,500

(Being the depreciation expense is recorded)

Explanation:

The adjusting entry is shown below:

Depreciation expense $3,500

To Accumulated depreciation $3,500

(Being the depreciation expense is recorded)

For recording this transaction we debited the depreciation expense as it increased the expenses and at the same time it decreases the value of equipment so the accumulated depreciation would be credited