Equipment with a Residual Value of $50,000 at the End

question 177

Multiple Choice

Equipment with a residual value of $50,000 at the end of 10 years was acquired at the beginning of 2011 for $500,000. Assuming the use of the straight-line depreciation method, the journal entry to record depreciation expense for 2013 will have a debit to

• A)depreciation Expense and a credit to Accumulated Depreciation for $50,000.
• B)accumulated Depreciation and a credit to Equipment for $50,000.
• C)depreciation Expense and a credit to Equipment for $45,000.
• D)depreciation Expense and a credit to Accumulated Depreciation for $45,000.

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Definitions:

Federal Reserve District Banks

The 12 regional banks that make up the Federal Reserve System of the United States, each serving a specific geographic area.

Securities

Financial instruments that represent an ownership position in publicly-traded corporations (stocks), a creditor relationship with a governmental body or a corporation (bonds), or rights to ownership as represented by an option.

Bond Prices

are the market value of bonds, which inversely correlate with interest rates; when rates go up, bond prices typically go down, and vice versa.

Interest Rates

The proportion of a total amount of money that is levied for its utilization, typically stated on a yearly basis.