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Accounting (Text Only)

26th Edition
Carl Warren + 2 others
ISBN: 9781285743615

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Accounting (Text Only)

26th Edition
Carl Warren + 2 others
ISBN: 9781285743615
Textbook Problem
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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.

To determine

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.

Explanation
...
Description Post.Ref. Debit ($) Credit ($)
1 Cash   40,000  
      Person LJ, Capital     40,000
  (To record the owner’s capital)      
 
2 Supplies   2,500  
      Cash     2,500
  (To record the purchase of supplies)      
 
3 Equipment   14,500  
      Accounts payable     10,500
      Cash     4,000
  (To record the purchase of equipment party for cash and partly on account)      
 
4 Operating expense   4,850  
       Cash     4,850
  (To record the operating expense incurred)      
 
5 Accounts receivable

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