On January 1, Imlay Company purchases manufacturing equipment costing $95,000 that is expected to have a five-year life and an estimated salvage value of $5,000. Imlay uses the straight-line depreciation method to allocate costs, and only prepares adjustments at year-end. The adjusting entry needed on December 31 of the first year is:
A. Debit Depreciation Expense, $9,000; credit Accumulated Depreciation, $9,000. B. Debit Depreciation Expense, $9,000; credit Equipment, $9,000. C. Debit Depreciation Expense, $18,000; credit Accumulated Depreciation, $18,000. D. Debit Depreciation Expense, $18,000; credit Equipment, $18,000. E. Debit Depreciation Expense, $90,000; credit Accumulated Depreciation, $90,000.
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