A Business Acquires Equipment for $140,000 on January 1,2011

question 51

Essay

A business acquires equipment for $140,000 on January 1,2011.The equipment depreciation will be $20,000 each year for the seven years of the asset's expected life.The business records depreciation once a year on December 31.Which of the following is the adjusting entry required on December 31,2011?
A) A debit $140,000 to Equipment and a credit $140,000 to Cash.
B) A debit $140,000 to Depreciation expense and a credit $140,000 to Accumulated depreciation.
C) A debit $20,000 to Depreciation expense and a credit $20,000 to Accumulated depreciation.
D) A debit $20,000 to Depreciation expense and a credit $20,000 to Equipment.

• A) A debit $140,000 to Equipment and a credit $140,000 to Cash.
• B) A debit $140,000 to Depreciation expense and a credit $140,000 to Accumulated depreciation.
• C) A debit $20,000 to Depreciation expense and a credit $20,000 to Accumulated depreciation.
• D) A debit $20,000 to Depreciation expense and a credit $20,000 to Equipment.

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Definitions:

Emotions

Intense feelings that are responses to internal or external events, affecting both psychological and physiological states.

Underlying Circuit

The fundamental electrical or neurobiological pathways that support specific functions or behaviors.

Two-factor Theory

A psychological theory positing that emotional experiences arise from a combination of a state of physiological arousal and a cognitive label identifying the reason for the arousal.

James-Lange Theory

A theory of emotion proposing that emotions result from our interpretations of our bodily reactions to stimuli.