A company purchased a machine for $192,000 on October 1, 2021. The estimated service life is 10 years with a $19,800 residual value. The company records partial-year depreciation based on the number of months in service. Depreciation expense for the year ended December 31, 2021, using straight-line depreciation, is

$4,305

Explanation:

Since the machine was purchased on October 1, you must record three months worth of depreciation (October, November and December).

depreciation expense per month = (machine's cost - salvage value) / 120 months = ($192,000 - $19,800) / 120 months = $1,435 per month

the journal to record depreciation expense will be:

December 31, 2021

Dr Depreciation expense 4,305

    Cr Accumulated depreciation - machine 4,305

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