question 12\n5 points\nif a fixed asset, such as a computer, were purchased on january 1 for $3,750 with an…

question 12\n5 points\nif a fixed asset, such as a computer, were purchased on january 1 for $3,750 with an estimated life of 3 years and a salvage or residual value of $150, the journal entry for monthly expense under straight - line depreciation is\ndepreciation expense 100\naccumulated depreciation 100\ndepreciation expense 1,200\naccumulated depreciation 1,200\naccumulated depreciation 1,200\ndepreciation expense 1,200\naccumulated depreciation 100\ndepreciation expense 100

question 12\n5 points\nif a fixed asset, such as a computer, were purchased on january 1 for $3,750 with an estimated life of 3 years and a salvage or residual value of $150, the journal entry for monthly expense under straight - line depreciation is\ndepreciation expense 100\naccumulated depreciation 100\ndepreciation expense 1,200\naccumulated depreciation 1,200\naccumulated depreciation 1,200\ndepreciation expense 1,200\naccumulated depreciation 100\ndepreciation expense 100

Answer

Explanation:

Step1: Calculate annual depreciation

The formula for straight - line depreciation is $Annual\ Depreciation=\frac{Cost - Salvage\ Value}{Useful\ Life}$. Here, $Cost = 3750$, $Salvage\ Value=150$, and $Useful\ Life = 3$ years. So, $Annual\ Depreciation=\frac{3750 - 150}{3}=\frac{3600}{3}=1200$.

Step2: Calculate monthly depreciation

Since there are 12 months in a year, $Monthly\ Depreciation=\frac{Annual\ Depreciation}{12}$. Substitute $Annual\ Depreciation = 1200$ into the formula, $Monthly\ Depreciation=\frac{1200}{12}=100$.

Step3: Determine the journal entry

When recording depreciation expense, the account "Depreciation Expense" is debited (increased) and "Accumulated Depreciation" is credited (increased). The amount for each is the monthly depreciation of 100.

Answer:

A. Depreciation Expense 100, Accumulated Depreciation 100