End-of-period procedures > Month-end procedures > Task 7: Record depreciation
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To record depreciation
In the following example, we have a header account, Motor Vehicles - Company Vans numbered 1‑2300, and a detail account Company Vans - At Cost) numbered 1‑2310. We have created a new asset account called Company Vans - Accum Dep’n numbered 1‑2320. Notice that the header account shows the current book value of the van.
Once you’ve determined your depreciation amounts, make journal entries to credit the new accumulated depreciation asset accounts (for example, the Company Vans - Accum Dep’n account) and debit the new depreciation expense account. The accumulated depreciation asset accounts will always have a negative balance to show a reduction in the value of the depreciable assets.
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