Concept explainers
Journalize the given transaction, post them to the respective ledger accounts and identify the activities for account 202 for the month.
Explanation of Solution
Journal entry is a set of economic events which can be measured in monetary terms. These are recorded chronologically and systematically.
Debit:
A debit, is an accounting term that refers to the left side of an account. The term debit is be denoted by (Dr). The recording amount on the left side of the account is known as debiting.
Credit:
A credit, is an accounting term that refers to the right side of an account. The term credit is denoted as (Cr). The recording amount on the right side of the account is known as crediting.
Rules of Debit and Credit:
Following rules are followed for debiting and crediting different accounts while they occur in business transactions:
- Debit, all the increase in the assets, the expenses and the dividends, all the decrease in liabilities, revenues and the stockholders’ equities.
- Credit, all the increase in the liabilities, the revenues, and the stockholders’ equities, and all decreases in the assets, and the expenses.
Pass the journal entries for the given transactions:
General Journal | Page - 1 | |||
Date | Description | Post | Debit | Credit |
2019 | ||||
December 3 | Cash | 101 | $25,000 | |
CW Capital | 301 | $25,000 | ||
(To record the receipt of capital) |
Table (1)
General Journal | Page - 2 | |||
Date | Description | Post | Debit | Credit |
2019 | ||||
December 4 | Computer | 131 | $25,000 | |
Cash | 101 | $25,000 | ||
(To record the purchase of computer on cash) | ||||
December 5 | Furnitures and fixtures | 151 | $7,500 | |
Accounts payable | 202 | $7,500 | ||
(To record the purchase of furniture and fixtures on account) | ||||
December 6 | Office Equipment | 141 | $2,800 | |
Cash | 101 | $2,800 | ||
(To record the purchase of equipment on cash) | ||||
December 10 | 111 | $3,200 | ||
Fees Income | 401 | $3,200 | ||
(To record the service provided on account) | ||||
December 11 | Office supplies | 121 | $1,050 | |
Cash | 101 | $1,050 | ||
(To record the purchase of supplies in cash) | ||||
December 15 | Accounts payable | 202 | $7,500 | |
Cash | 101 | $7,500 | ||
(To record the payment of invoice for furniture purchased) |
Table (2)
General ledger:
General ledger is a record of all accounts of assets, liabilities, and
GENERAL LEDGER | ||||||
ACCOUNT: Cash | Account No.: 101 | |||||
Date | Description | Post. Ref. | Debit | Credit | Balance | |
Debit | Credit | |||||
2019 | ||||||
December 3 | J1 | $ 25,000 | $ 25,000 | |||
December 4 | J2 | $ 2,500 | $ 22,500 | |||
December 6 | J2 | $ 2,800 | $ 19,700 | |||
December 11 | J2 | $ 1,050 | $ 18,650 | |||
December 15 | J2 | $ 7,500 | $ 11,150 | |||
ACCOUNT: Accounts receivable | Account No.: 111 | |||||
Date | Description | Post. Ref. | Debit | Credit | Balance | |
Debit | Credit | |||||
2019 | ||||||
December 10 | J2 | $ 3,200 | $ 3,200 | |||
ACCOUNT: Office Supplies | Account No.: 121 | |||||
Date | Description | Post. Ref. | Debit | Credit | Balance | |
Debit | Credit | |||||
2019 | ||||||
December 11 | J2 | $ 1,050 | $ 1,050 | |||
ACCOUNT: Computers | Account No.: 131 | |||||
Date | Description | Post. Ref. | Debit | Credit | Balance | |
Debit | Credit | |||||
2019 | ||||||
December 4 | J2 | $ 2,500 | $ 2,500 | |||
ACCOUNT: Office Equipment | Account No.: 141 | |||||
Date | Description | Post. Ref. | Debit | Credit | Balance | |
Debit | Credit | |||||
2019 | ||||||
December 6 | J2 | $ 2,800 | $ 2,800 | |||
ACCOUNT: Furnitures and fixtures | Account No.: 151 | |||||
Date | Description | Post. Ref. | Debit | Credit | Balance | |
Debit | Credit | |||||
2019 | ||||||
December 5 | J2 | $ 7,500 | $ 7,500 |
Table (3)
GENERAL LEDGER | ||||||
ACCOUNT: Accounts payable | Account No.: 202 | |||||
Date | Description | Post. Ref. | Debit | Credit | Balance | |
Debit | Credit | |||||
2019 | ||||||
December 5 | J2 | $ 7,500 | $ 7,500 | |||
December 15 | J2 | $ 7,500 | $ 0 | |||
ACCOUNT: CW Capital | Account No.: 301 | |||||
Date | Description | Post. Ref. | Debit | Credit | Balance | |
Debit | Credit | |||||
2019 | ||||||
December 3 | J1 | $ 25,000 | $ 25,000 | |||
ACCOUNT: Fees Income | Account No.: 401 | |||||
Date | Description | Post. Ref. | Debit | Credit | Balance | |
Debit | Credit | |||||
2019 | ||||||
December 10 | J2 | $ 3,200 | $ 3,200 |
Table (4)
The Account 202 is the Accounts payable Account. It was credited for the purchase on December 5th for $7,500 and it was debited on December 15th for $7,500, and there is no balance in the account on the end of the month.
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Chapter 4 Solutions
COLLEGE ACCOUNTING: CONTEMP APPROACH
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