At December 31, the unadjusted trial balance of H\&R Tacks reports Equipment of \( \$ 32,000 \) and zero balances in Accumulated Depreciation and Depreciation Expense. Depreciation for the period is estimated to be \( \$ 6,400 \). Required: 1. Prepare the adjusting journal entry on December 31. 2. Post the beginning balances and adjusting entries to the following T-accounts. Complete this question by entering your answers in the tabs below. \begin{tabular}{|l|l|l}\hline Required 1 & Required 2 \\ Prepare the adjusting journal entry on December 31. \\ Note: If no entry is required for a transaction or event, select "No Journal Entry Required" in the first account field. \end{tabular}

To solve the problem, we will follow the steps outlined in the requirements. ### Required 1: Prepare the Adjusting Journal Entry on December 31 1. **Identify the accounts involved**: - Depreciation Expense (an expense account) - Accumulated Depreciation (a contra asset account) 2. **Determine the amounts**: - Depreciation Expense = \( \$ 6,400 \) - Accumulated Depreciation = \( \$ 6,400 \) 3. **Prepare the journal entry**: - Debit Depreciation Expense for \( \$ 6,400 \) - Credit Accumulated Depreciation for \( \$ 6,400 \) The adjusting journal entry will be: | Date | Account Title | Debit | Credit | |---------------|------------------------------|-----------|-----------| | December 31 | Depreciation Expense | 6,400 | | | | Accumulated Depreciation | | 6,400 | ### Required 2: Post the Beginning Balances and Adjusting Entries to T-Accounts Now, we will create T-accounts for Equipment, Accumulated Depreciation, and Depreciation Expense. 1. **T-Account for Equipment**: - Beginning Balance: \( \$ 32,000 \) ``` Equipment ----------------- | 32,000 | ``` 2. **T-Account for Accumulated Depreciation**: - Beginning Balance: \( \$ 0 \) - Adjusting Entry: \( \$ 6,400 \) (Credit) ``` Accumulated Depreciation ----------------- | | 6,400 ``` 3. **T-Account for Depreciation Expense**: - Adjusting Entry: \( \$ 6,400 \) (Debit) ``` Depreciation Expense ----------------- | 6,400 | ``` ### Summary of T-Accounts - **Equipment**: ``` Equipment ----------------- | 32,000 | ``` - **Accumulated Depreciation**: ``` Accumulated Depreciation ----------------- | | 6,400 ``` - **Depreciation Expense**: ``` Depreciation Expense ----------------- | 6,400 | ``` This completes the required journal entry and the posting to the T-accounts.