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On January 1, 2017, Salt Creek Country Club purchased a new riding mower for $15,900. The mower is expected to have a 10-year life with a $2,200 salvage value. What journal entry would Salt Creek make on December 31, 2017, if it uses straight-line depreciation

Respuesta :

Shahzaibfaraz

Answer:

31 Dec 2017   Depreciation Expense                                   $1370 Dr

                             Accumulated Depreciation-Riding mower    $1370 Cr

Explanation:

The straight line method of depreciation charges a constant depreciation per year through out the useful life of the asset. The depreciation expense per year under straight line method is calculated as follows,

Depreciation expense = ( Cost - Salvage Value) / Estimated useful life

Thus,

Depreciation expense = (15900 - 2200) / 10

Depreciation expense = $1370 per year

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