Holman Company Owns Equipment with an Original Cost of $95,000

Multiple Choice

Holman Company owns equipment with an original cost of $95,000 and an estimated salvage value of $5,000 that is being depreciated at $15,000 per year using the straight-line depreciation method, and only prepares adjustments at year-end. The adjusting entry needed to record annual depreciation is:

A) Debit Depreciation Expense, $15,000; credit Equipment, $15,000.
B) Debit Depreciation Expense, $15,000; credit Accumulated Depreciation, $15,000.
C) Debit Depreciation Expense, $10,000; credit Accumulated Depreciation, $10,000.
D) Debit Depreciation Expense, $10,000; credit Equipment, $10,000.
E) Debit Equipment, $15,000; credit Accumulated Depreciation, $15,000.