American Machine Inc. purchased a machine for $20,000 cash on July 1 of the current year. After the adjusting journal entry is made on December 31 of the current year for depreciation expenses, what is the net balance of the machine on the balance sheet? Assume no salvage value and a four-year useful life.

a.

$15,000

b.

$17,500

c.

$2,500

d.

$20,000