Kathys Kitchen bought a van to deliver Kathys famous pies. The van cost $20,000. Kathy estimates that, with the hard use the van will get, it will be of use for four years. At the end of the four years, it will be sold for parts for $2,000.

Required:

Question 1

1. Determine the monthly depreciation expense using the straight-line method.

Question 2

2. Make the journal entry to record depreciation expenses for January.