Journal Entry for Depreciation on Furniture and Machinery

Explanation:

Depreciation is a process of allocating the cost of an asset over its useful life. It is an expense that reflects the reduction in the value of an asset due to wear and tear, obsolescence, or any other cause. Depreciation is recorded in the books of accounts to spread the cost of the asset over its useful life and to match the expense with the revenue generated by the asset.

In this case, the company has provided depreciation on furniture and machinery. The amount of depreciation on furniture is Rs. 500, and the amount of depreciation on machinery is Rs. 2,000.

To record this transaction, the following journal entry will be made:

Journal Entry

Depreciation on Furniture Account----------------------Dr.---------------------Rs. 500

Depreciation on Machinery Account-------------------Dr.--------------------Rs. 2,000

To Furniture Account--------------------------------------------Cr.---------------------Rs. 500

To Machinery Account------------------------------------------Cr.--------------------Rs. 2,000

Explanation:

The above journal entry shows that the depreciation on furniture and machinery accounts are debited with Rs. 500 and Rs. 2,000, respectively. The furniture account and machinery account are credited with Rs. 500 and Rs. 2,000, respectively.

The depreciation on furniture and machinery is an expense for the company, and it is debited to their respective accounts. At the same time, the value of the furniture and machinery is reduced by the same amount, and it is credited to their respective accounts. The net effect of this transaction is that the value of the furniture and machinery is reduced, and the expense is recorded in the books of accounts.

In conclusion, the journal entry for providing depreciation on furniture and machinery is recorded to spread the cost of the asset over its useful life and to match the expense with the revenue generated by the asset.

Depreciation a/c. dr. 2500 to furniture a/c. 500 to machinery a/c. 2000