An adjusting entry to record depreciation for equipment with cost $24,000, estimated life 6 years, no salvage value, using straight-line method is to

• A. Debit Depreciation Expense 4,000; Credit Accumulated Depreciation 4,000
• B. Debit Accumulated Depreciation 4,000; Credit Depreciation Expense 4,000
• C. Debit Depreciation Expense 2,000; Credit Accumulated Depreciation 2,000
• D. Debit Depreciation Expense 4,000; Credit Equipment 4,000

Answer: (A)

Depreciation expense is recognized to allocate the equipment’s cost over its useful life. Using straight-line depreciation, the annual expense is (cost minus salvage value) divided by useful life: (24,000 − 0) / 6 = 4,000 per year. The adjusting entry increases depreciation expense (a debit) and increases accumulated depreciation (a credit), which is a contra-asset that reduces the equipment’s net book value on the balance sheet. So the correct entry is Debit Depreciation Expense 4,000; Credit Accumulated Depreciation 4,000. The other options would either affect the wrong accounts or use an incorrect amount.