General, Inc purchased a van on May 1, 2016, for $800,000
Estimated life of the van was five years, and its estimated residual value was $80,000. General uses the straight-line method of depreciation. Prepare the journal entry to record the depreciation expense for 2016 on the van.
What will be an ideal response
Depreciation Expense—Van 96,000
Accumulated Depreciation—Van 96,000 .Depreciation per year = (Cost - Residual value) / Useful life
Depreciation per year = ($800,000 - 80,000 ) / 5 = $144,000
Depreciation for 2016 = $144,000 x 8/12 = $96,000
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