Instructions: Record AJE at 12/31 and the initial or subsequent JE for each assuming no previous AJE has been made. For more practice do Quick Study 3-8 in the back of chapter 3 in your textbook. 1C - Prepaid Expense: On January 1, paid cash for equipment that cost $13,000 with a salvage value of $1,000 at the end of a 6 year useful life. Annual Depreciation = (cost of plant asset - salvage value)/useful life in years Ref Credit Date 1/1 General Journal Account Name Equipment To cash Debit 13,000 Initial JE 13,000 AJE 12/31 Depreciation 2,000 2,000 Depreciation Exp. 0 Accum. Depreciation