Depreciation on equipment for the year is $3,480. Required: (a) Record the journal entry if the company prepares adjustments once a year. (b) Record the journal entry if the company prepares adjustments on a monthly basis

See explanation section

Explanation:

A) To record the journal entry of annual adjustments of depreciation on equipment -

Debit        Depreciation expense - Equipment      $3,480

Credit         Accumulated depreciation                  $3,480

Note: As the depreciation expense $3,480 is for one year, the entire amount will be debited to adjust the expense.

B) To record the journal entry of monthly adjustments of depreciation on equipment -

Debit        Depreciation expense - Equipment      $290

Credit         Accumulated depreciation                  $290

Note: As the depreciation expense $3,480 is for one year, the monthly expense is = $(3,480/12) = $290 amount will be debited to adjust the expense for each month.