Question

I want to record $500 depreciation in journal. How should i use following accounts to record？

416 - Depreciation 418 - Bad and Doubtful Debts 420 - Entertainment 425 - Freight & Courier 429 - Equipment Hire 433 - Insurance 437 - Interest Expense 441 - Legal expenses 445 - Light, Power, Heating 449 - Motor Vehicle Expenses 453 - Office Expenses 461 - Printing & Stationery 469 - Rent 473 - Repairs and Maintenance 477 - Wages and Salaries 478 - Superannuation 485 - Subscriptions 489 - Telephone & Internet 493 - Travel - National 494 - Travel - International 496 - Low Value Tools & Equipment 499 - Realised Currency Gains 500 - Distributions to Partners 505 - Income Tax Expense 510 - Loss on Disposal of Assets Assets 620 - Prepayments 635 - Allowance for Doubtful Debts 640 - Stock on Hand 710 - Plumbing Equipment 711 - Less Accumulated Depreciation on Plumbing Equipment 720 - Computer Equipment 721 - Less Accumulated Depreciation on Computer Equipment 730 - Motor Vehicles 731 - Less Accumulated Depreciation on Motor Vehicles 740 - Capital Gain on Disposal of Assets Liabilities 805 - Accrued Expenses 810 - Contra Clearing Account 820 - GST 830 - Income Tax Payable 840 - Historical Adjustment 850 - Suspense 860 - Rounding

Answer 1

Answer:

Journal Entry in following cases:

a. If the depreciation of $500 is to be recorded for Plumbing Equipment:

Account Titles & Explanation	Debit	Credit
416 - Depreciation	$500
711 - Accumulated Depreciation of Plumbing Equipment		$500
To record depreciation on Pluming Equipment

b. If the depreciation of $500 is to be recorded for Computer Equipment:

Account Titles & Explanation	Debit	Credit
416 - Depreciation	$500
721 - Accumulated Depreciation on Computer Equipment		$500
To record depreciation on Computer Equipment

c. If the depreciation of $500 is to be recorded for Motor Vehicles:

Account Titles & Explanation	Debit	Credit
416 - Depreciation	$500
731 - Accumulated Depreciation on Motor Vehicles		$500
To record depreciation on Motor Vehicles

Explanation:

Generally used journal entry for recording Depreciation on any fixed asset is as follows:

Account Titles & Explanation	Debit	Credit
Depreciation Expense	XXX
Accumulated Depreciation		XXX
To record depreciation for the period

Depreciation Expense is an Expense account which goes to Income Statement and Accumulated Depreciation is a Contra Asset account the amount of which is deducted from the respective asset account (shown in the balance sheet) to arrive at the book value.

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