On January 1, ABC Catering purchased an oven for $5,000. The oven is expected to last five years and have no salvage value. Select the adjusting entry made on December 31, to record the depreciation of the oven for one year?

The answers are:

Depreciation Expense 1,000

Accumulated Depreciation - Equipment 1,000

Explanation:

The oven will be depreciated in five years, so the depreciation expense will be $1,000 per year. Depreciation expense account must be debited $1,000 (increasing expense accounts are debited) while Accumulated depreciation - Equipment should be credited $1,000 (decreasing assets accounts are credited).