Vargas Company purchased a computer for $3400 on January 1, Year 1. The computer is estimated to have a 5-year useful life and a $700 salvage value. What adjusting entry would Vargas record on December 31, Year 1 to recognize expense related to use of the computer?
A.
| Depreciation expense | 680? | |
| Accumulated depreciation | 680? |
B.
| Accumulated depreciation | 540? | |
| Depreciation expense | 540? |
C.
| Depreciation expense | 540? | |
| Computer | 540? |
D.
| Depreciation expense | 540? | |
| Accumulated depreciation | 540? |
Answer: D
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