The journal entries are passed; ledger accounts and trial balance is prepared.
The debit-credit rules for recording the journal entries are as under −
- Debit what comes in, credit what goes out.
- Debit the receiver, credit the giver.
- Debit the expenses and assets, credit the incomes and liabilities.
1. The journal entries in the books of Humble Management Services are passed as under-
Date | Particulars | Account No | Debit ($) | Credit ($) |
01-Sep | Cash account | 101 | 38,000 | |
| Office equipment account | 163 | 15,000 | |
| H. Humble, capital account | 301 | | 53,000 |
02-Sep | Prepaid rent account | 131 | 9,000 | |
| Cash account | 101 | | 9,000 |
04-Sep | Office equipment account | 163 | 8,000 | |
| Office supplies account | 124 | 2,400 | |
| Accounts payable account | 201 | | 10,400 |
08-Sep | Cash account | 101 | 3,280 | |
| Services revenue account | 401 | | 3,280 |
12-Sep | Accounts receivable account | 106 | 15,400 | |
| Services revenue account | 401 | | 15,400 |
13-Sep | Accounts payable account | 201 | 10,400 | |
| Cash account | 101 | | 10,400 |
19-Sep | Prepaid insurance account | 128 | 1,900 | |
| Cash account | 101 | | 1,900 |
22-Sep | Cash account | 101 | 7,700 | |
| Accounts receivable account | 106 | | 7,700 |
24-Sep | Accounts receivable account | 106 | 2,100 | |
| Services revenue account | 401 | | 2,100 |
28-Sep | H. Humble, withdrawals account | 302 | 5,300 | |
| Cash account | 101 | | 5,300 |
29-Sep | Office supplies account | 124 | 550 | |
| Accounts payable account | 201 | | 550 |
30-Sep | Utilities expense account | 690 | 860 | |
| Cash account | 101 | | 860 |
2. Ledger accounts in the books of Humble Management Services are passed as under-
Cash account |
Date | Particulars | Debit ($) | Credit ($) | Account #101 Balance (Dr) |
01-Sep | Opening balance | --- | | |
01-Sep | H. Humble capital account | 38,000 | | 38,000 |
02-Sep | Prepaid rent account | | 9,000 | 29,000 |
08-Sep | Services revenue account | 3,280 | | 32,280 |
13-Sep | Accounts payable account | | 10,400 | 21,880 |
19-Sep | Prepaid insurance account | | 1,900 | 19,980 |
22-Sep | Accounts receivable account | 7,700 | | 27,680 |
28-Sep | H Humble withdrawals account | | 5,300 | 22,380 |
30-Sep | Utilities expense | | 860 | 21,520 |
Accounts receivable account |
Date | Particulars | Debit ($) | Credit ($) | Account #106 Balance (Dr) |
01-Sep | Opening Balance | --- | | |
12-Sep | Services revenue account | 15,400 | | 15,400 |
22-Sep | Cash account | | 7,700 | 7,700 |
24-Sep | Services revenue account | 2,100 | | 9,800 |
Office supplies account |
Date | Particulars | Debit ($) | Credit ($) | Account #124 Balance (Dr) |
04-Sep | Accounts payable account | 2,400 | | 2,400 |
29-Sep | Accounts payable account | 550 | | 2,950 |
Prepaid insurance account |
Date | Particulars | Debit ($) | Credit ($) | Account #128 Balance (Dr) |
01-Sep | Opening Balance | --- | | |
19-Sep | Cash account | 1,900 | | 1,900 |
Prepaid rent account |
Date | Particulars | Debit ($) | Credit ($) | Account #131 Balance (Dr) |
01-Sep | Opening Balance | --- | | |
02-Sep | Cash account | 9,000 | | 9,000 |
Office equipment account |
Date | Particulars | Debit ($) | Credit ($) | Account #163 Balance (Dr) |
01-Sep | Opening Balance | --- | | |
01-Sep | H. Humble capital account | 15,000 | | 15,000 |
04-Sep | Accounts payable account | 8,000 | | 23,000 |
Accounts payable account |
Date | Particulars | Debit ($) | Credit ($) | Account #201 Balance (Cr) |
01-Sep | Opening Balance | --- | | |
04-Sep | Office equipment account | | 8,000 | 8,000 |
04-Sep | Office supplies account | | 2,400 | 10,400 |
13-Sep | Cash account | 10,400 | | 0 |
29-Sep | Office supplies account | | 550 | 550 |
H. Humble capital account |
Date | Particulars | Debit ($) | Credit ($) | Account #301 Balance (Cr) |
01-Sep | Opening Balance | --- | | |
01-Sep | Cash account | | 38,000 | 38,000 |
01-Sep | Office equipment account | | 15,000 | 53,000 |
H. Humble withdrawals account |
Date | Particulars | Debit ($) | Credit ($) | Account #302 Balance (Dr) |
01-Sep | Opening Balance | --- | | |
28-Sep | Cash account | 5,300 | | 5,300 |
Services Revenue account |
Date | Particulars | Debit ($) | Credit ($) | Account #401 Balance (Cr) |
01-Sep | Opening Balance | --- | | |
08-Sep | Cash account | | 3,280 | 3,280 |
12-Sep | Accounts receivable account | | 15,400 | 18,680 |
24-Sep | Accounts receivable account | | 2,100 | 20,780 |
Utilities expense account |
Date | Particulars | Debit ($) | Credit ($) | Account #690 Balance (Dr) |
01-Sep | Opening Balance | --- | | |
30-Sep | Cash account | 860 | | 860 |
3. Trial balance of Humble Management Services as on September, 30
S. No | Ledger No | Ledger Name | Debit ($) | Credit ($) |
1 | 101 | Cash | 21,520 | |
2 | 106 | Accounts receivable | 9,800 | |
3 | 124 | Office supplies | 2,950 | |
4 | 128 | Prepaid insurance | 1,900 | |
5 | 131 | Prepaid rent | 9,000 | |
6 | 163 | Office equipment | 23,000 | |
7 | 201 | Accounts payable | | 550 |
8 | 301 | H. Humble, capital | | 53,000 |
9 | 302 | H. Humble, withdrawals | 5,300 | |
10 | 401 | Services revenue | | 20,780 |
11 | 690 | Utilities expense | 860 | |
TOTAL | 74,330 | 74,330 |
The journal entries are thus passed and the ledger accounts and trial balance are thus prepared.