TRANSACTION ANALYSIS: Jensen Corp. is a biopharmaceutical company that develops and commercializes products targeting the extracellular matrix for the endocrinology, dermatology, and drug delivery markets.

Transaction 1A January 1, Y3: On January 1, Y3 Jensen Corp. purchased a lab vacuum pump for $30,000 on account. The estimated residual value was $10,000 and the estimated useful life was five years. Jensen Company depreciates equipment using the straight-line method. Give the journal entry for the purchase of the equipment.

Q17. Indicate the account title to be debited by $30,000.

A. Acct Receivable B. Acct Payable C. Cash D. Equipment E. Cost of Sales

Q18. Indicate the account title to be credited by $30,000.

A. Acct Receivable B. Acct Payable C. Cash D. Equipment E. Cost of Sales Revenue

Transaction 1B December 31, Y3: Give the adjusting entry that was made at the end of Y3 for the depreciation on the equipment.

Q19. Compute the depreciation expense (straight-line method).

A. $10,000 B. $6,000 C. $4,000 D. $2,000

Q20. Indicate the account title to be debited by the above amount.

A. Acct Payable B. Accumulated Depreciation (Equipment) C. Depreciation Expense

D. Cash E. Equipment

Q21. Indicate the account title to be credited by the above amount.

A. Acct Payable B. Accumulated Depreciation (Equipment) C. Depreciation Expense

D. Cash E. Equipment