USA Section 179 accounting?

AGH the CPA

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I may be over thinking this. If we buy a laptop for $2000 and want to section 179 it, what are the journal entries that we need to make?

DR office equipment (expense account)
CR cash?

OR

DR office equipment (fixed asset account)
CR cash

DR depreciation expenses
CR accumulated depreciation?
 

Werner Reisacher

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Agree that the latter journal entry is correct.
Just a word of caution. For companies that have large amounts of Fixed Assets that they can depreciate under Section 179, I suggest that they depreciate their assets based on the usual depreciation rates in the books and apply the Section 179 bonus depreciation in the tax accounts only. Otherwise, the comparison of trends and performance analysis on a yearly basis becomes difficult and meaningless.
 

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