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}

Certainly! Let's dive into your accounting inquiry with an engaging flourish. To prepare the adjusting journal entry on December 31, you would need to recognize the depreciation expense associated with the equipment. The journal entry is as follows: **Journal Entry:** - **Debit Depreciation Expense** \( \$6,400 \) - **Credit Accumulated Depreciation** \( \$6,400 \) This entry reflects that the equipment has incurred a cost of \( \$6,400 \) over the accounting period as an expense and adjusts for the accumulated depreciation on the balance sheet. Next, let's look at how this impacts the T-accounts. **T-Accounts:** 1. **Equipment** - Beginning Balance: \( \$32,000 \) - Ending Balance: \( \$32,000 \) (no change) 2. **Accumulated Depreciation** - Beginning Balance: \( \$0 \) - Credit: \( \$6,400 \) (from the journal entry) - Ending Balance: \( \$6,400 \) 3. **Depreciation Expense** - Debit: \( \$6,400 \) (from the journal entry) These entries effectively reflect the expense incurred and the impact on your asset account, allowing for a clear representation of the equipment's value and the accumulated depreciation over time. Happy accounting!