Use the Following Information to Solve the Following Questions

question 56

Multiple Choice

Use the following information to solve the following questions:
Egypt Corp. owns equipment that originally cost $ 100,000. At December 31, 2020, the equipment's book value (after 2020 depreciation was booked) is $ 60,000. It is determined that the fair value of the equipment at this date is $ 90,000. Although Egypt's policy is to apply the revaluation model using the proportionate method, this is the first time the company has done it.
-The adjusting entry to record the revaluation will include a

• A) debit to Accumulated Depreciation of $ 20,000.
• B) credit to Equipment of $ 10,000.
• C) credit to Revaluation Surplus (OCI) of $ 30,000.
• D) debit to Revaluation Surplus (OCI) of $ 10,000.

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Definitions:

Annually Compounded

Refers to the process of calculating and adding interest to a principal sum once per year.

Maturity Values

The amount payable to the holder of a financial instrument at its maturity date, often the principal plus interest.

Investment

An asset or item acquired with the goal of generating income or appreciation.

Compounded Monthly

Describes the method of computing interest by adding the interest from past periods to the original principal amount and then doing the calculations monthly.