An example of the entries for a purchase of equipment and the recording of one years depreciation might be:

purchase

Jan. 1, 2006

dr equipment 20,000.

cr cash 20,000.

depreciation for the year

Dec. 31, 2006

dr depreciation expense 4,000.

cr accumulated depreciation 4,000.

To determine the book value of the equipment, you would take the cost of the equipment 20,000. less the accumulated depreciation 4,000. which would equal 16,000. 16,000. is the book value

Let’s do one more entry for depreciation the following year:

Dec. 31, 2007

dr depreciation expense 4,000.

cr accumulated depreciation 4,000.

Now the balance in the accumulated depreciation is 8,000.

So the book value would now be 20,000. less 8,000. equals

12,000.

Of course, each year the depreciation expense will close.

The accumulated depreciation increases, (up to a point).

And, the book value decreases.

I hope this helps.