What year-end adjusting entry is recorded for depreciation of the computer software?
Computer software isn’t your typical depreciable fixed asset. Because it’s hard to see or touch computer software, you may consider it to be an intangible asset. However, computer software is part and parcel of using computer hardware, and computer hardware isn’t good for anything without software to tell it what to do. The entry to record the annual depreciation on the computer software is: [Debit]. Depreciation Expense Computer Software = $19,250 [Credit]. Accumulated Depreciation Computer Software = $19,250 Note: In the above entry, I debit a specific depreciation expense account, but this doesn’t mean that this depreciation account is disclosed separately in the business’s income statement. Probably it’s grouped with other depreciation expense accounts, and only one total depreciation expense is reported in the income statement. A full-year depreciation amount is recorded because the business has used the asset the entire year. The calculation is $57,750 / 3 years = $19,250 per yea
