Accounting (Text Only)

26th Edition
Carl Warren + 2 others
ISBN: 9781285743615



Accounting (Text Only)

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

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 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   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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