Balance Sheet Ledger Accounts
Journal Entries
Example
Company A was incorporated on January 1, 2010 with an initial capital of 5,000 shares of common stock having $20 par value. During the first month of its operations, the company engaged in following transactions:
Date
Transaction
Jan 2
An amount of $36,000 was paid as advance rent for three months.
Jan 3
Paid $60,000 cash on the purchase of equipment costing $80,000. The remaining amount was recognized as a one year note payable with interest rate of 9%.
Jan 4
Purchased office supplies costing $17,600 on account.
Jan 13
Provided services to its customers and received $28,500 in cash.
Jan 13
Paid the accounts payable on the office supplies purchased on January 4.
Jan 14
Paid wages to its employees for first two weeks of January, aggregating $19,100.
Jan 18
Provided $54,100 worth of services to its customers. They paid $32,900 and promised to pay the remaining amount.
Jan 23
Received $15,300 from customers for the services provided on January 18.
Jan 25
Received $4,000 as an advance payment from customers.
Jan 26
Purchased office supplies costing $5,200 on account.
Jan 28
Paid wages to its employees for the third and fourth week of January: $19,100.
Jan 31
Paid $5,000 as dividends.
Jan 31
Received electricity bill of $2,470.
Jan 31
Received telephone bill of $1,494.
Jan 31
Miscellaneous expenses paid during the month totaled $3,470
The following table shows the journal entries for the above events.
Date
Account
Debit
Credit
Jan 1
Cash
100,000
Common Stock
100,000
Jan 2
Prepaid Rent
36,000
Cash
36,000
Jan 3
Equipment
80,000
Cash
60,000
Notes Payable
20,000
Jan 4
Office Supplies
17,600
Accounts Payable
17,600
Jan 13
Cash
28,500
Service Revenue
28,500
Jan 13
Accounts Payable
17,600
Cash
17,600
Jan 14
Wages Expense
19,100
Cash
19,100
Jan 18
Cash
32,900
Accounts Receivable
21,200
Service Revenue
54,100
Jan 23
Cash
15,300
Accounts Receivable
15,300
Jan 25
Cash
4,000
Unearned Revenue
4,000
Jan 26
Office
Example
Company A was incorporated on January 1, 2010 with an initial capital of 5,000 shares of common stock having $20 par value. During the first month of its operations, the company engaged in following transactions:
Date
Transaction
Jan 2
An amount of $36,000 was paid as advance rent for three months.
Jan 3
Paid $60,000 cash on the purchase of equipment costing $80,000. The remaining amount was recognized as a one year note payable with interest rate of 9%.
Jan 4
Purchased office supplies costing $17,600 on account.
Jan 13
Provided services to its customers and received $28,500 in cash.
Jan 13
Paid the accounts payable on the office supplies purchased on January 4.
Jan 14
Paid wages to its employees for first two weeks of January, aggregating $19,100.
Jan 18
Provided $54,100 worth of services to its customers. They paid $32,900 and promised to pay the remaining amount.
Jan 23
Received $15,300 from customers for the services provided on January 18.
Jan 25
Received $4,000 as an advance payment from customers.
Jan 26
Purchased office supplies costing $5,200 on account.
Jan 28
Paid wages to its employees for the third and fourth week of January: $19,100.
Jan 31
Paid $5,000 as dividends.
Jan 31
Received electricity bill of $2,470.
Jan 31
Received telephone bill of $1,494.
Jan 31
Miscellaneous expenses paid during the month totaled $3,470
The following table shows the journal entries for the above events.
Date
Account
Debit
Credit
Jan 1
Cash
100,000
Common Stock
100,000
Jan 2
Prepaid Rent
36,000
Cash
36,000
Jan 3
Equipment
80,000
Cash
60,000
Notes Payable
20,000
Jan 4
Office Supplies
17,600
Accounts Payable
17,600
Jan 13
Cash
28,500
Service Revenue
28,500
Jan 13
Accounts Payable
17,600
Cash
17,600
Jan 14
Wages Expense
19,100
Cash
19,100
Jan 18
Cash
32,900
Accounts Receivable
21,200
Service Revenue
54,100
Jan 23
Cash
15,300
Accounts Receivable
15,300
Jan 25
Cash
4,000
Unearned Revenue
4,000
Jan 26
Office