On 1-1-2010 a Machinery was purchased for `8000. It was sold on
30-6-2013 for `6000. Depreciation is charged at 10% on original cost.
Books are closed on 31st December every year. Prepare Machinery
Account and Depreciation Account for the above period
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The basic journal entry for depreciation is to debit the Depreciation Expense account(which appears in the income statement) and credit the Accumulated Depreciation account (which appears in the balance sheet as a contra account that reduces the amount of fixed assets).
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