Question

On January 1, Year 1, Rex Carr’s Driving School, Inc., purchased $550,000 of vehicles (Equipment) with an estimated useful life of 10 years or 100,000 miles and a $50,000 salvage value. The vehicles were driven 20,000 miles in Year 1 and 30,000 miles in Year 2.

Record the effect of the adjusting entry to record depreciation for Year 2 using the straight-line method:
If no effect, select "No Effect"

-       A.       B.       C.       D.       E.       F.       G.       H.       I.    Assets       -       A.       B.       C.       D.       E.       F.       G.       H.       I.    Liabilities       -       A.       B.       C.       D.       E.       F.       G.       H.       I.    Shareholders'; Equity

A. Credit Depreciation Expense 50,000 B. Debit Depreciation Expense 100,000 C. Credit Accumulated Depreciation 100,000 D. Debit Equipment 50,000 E. Credit Equipment 100,000 F. Credit Accumulated Depreciation 50,000 G. No Effect H. Debit Accumulated Depreciation 100,000 I. Debit Depreciation Expense 50,000

Answer 1

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