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Accounting (Text Only)
Journal entries
Based upon the T accounts in Exercise 2-13, prepare the nine journal entries from which the postings were made. Journal entry explanations may be omitted.
Journal:
Journal is the book of original entry. Journal consists of the day today financial transactions in a chronological order. The journal has two aspects; they are debit aspect and the credit aspect.
Rules of debit and credit:
“An increase in an asset account, an increase in an expense account, a decrease in liability account, and a decrease in a revenue account should be debited.
Similarly, an increase in liability account, an increase in a revenue account and a decrease in an asset account, a decrease in an expenses account should be credited”.
To prepare: The journal entry of Company W for the month of June.
| Description | Post.Ref. | Debit ($) | Credit ($) | |||
| 1 | Cash | Â | 40,000 | Â | ||
| Â | Â Â Â Person LJ, Capital | Â | Â | 40,000 | ||
|  | (To record the owner’s capital) |  |  |  | ||
| Â | ||||||
| 2 | Supplies | Â | 2,500 | Â | ||
| Â | Â Â Â Cash | Â | Â | 2,500 | ||
| Â | (To record the purchase of supplies) | Â | Â | Â | ||
| Â | ||||||
| 3 | Equipment | Â | 14,500 | Â | ||
| Â | Â Â Â Accounts payable | Â | Â | 10,500 | ||
| Â | Â Â Â Cash | Â | Â | 4,000 | ||
| Â | (To record the purchase of equipment party for cash and partly on account) | Â | Â | Â | ||
| Â | ||||||
| 4 | Operating expense | Â | 4,850 | Â | ||
| Â | Â Â Â Â Cash | Â | Â | 4,850 | ||
| Â | (To record the operating expense incurred) | Â | Â | Â | ||
| Â | ||||||
| 5 | Accounts receivable | ...|||||
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