Explanation Journal: Journal is the method of recording monetary business transactions in chronological order. It records the debit and credit aspects of each transaction to abide by the double-entry system. Rules of Debit and Credit: Following rules are followed for debiting and crediting different accounts while they occur in business transactions: Debit , all increase in assets, expenses and dividends, all decrease in liabilities, revenues and stockholders’ equities. Credit , all increase in liabilities, revenues, and stockholders’ equities, all decrease in assets, expenses. Journal entries of Company M are as follows: June, 1– Payment of interest expense Date Accounts Post Ref. Debit ($) Credit ($) June, 1 Interest expense 900 Cash 900 (To record payment of interest expense) Table (1) Interest expense is a component of stockholder’s equity and it decreased the value of stockholder’s equity by $900. Hence, debit the interest expense account for $900. Cash is an assets account and it decreased the value of asset by $900. Hence, credit the cash account for $900. June, 5 – Office furniture purchased on account: Date Accounts Post Ref. Debit ($) Credit ($) June, 5 Office furniture 2,500 Accounts payable 2,500 (To record purchase of office furniture on account) Table (2) Office furniture is an assets account and it increased the value of asset by $2,500. Hence, debit the office furniture account for $2,500. Accounts payable is a liability account and it increased the value of liability by $2,500. Hence, credit the liability account by $2,500. June, 10– Service performed on account: Date Accounts Post Ref. Debit ($) Credit ($) June, 10 Accounts receivable 1,500 Service revenue 1,500 (To record service performed to customer on account) Table (3) Accounts receivable is an assets account and it increased the value of asset by $1,500. Hence, debit the accounts receivable account for $1,500. Service revenue is a component of stockholder’s equity and it increased the value of stockholder’s equity by $1,500. Hence, debit the service revenue account for $1,500. June, 12 – Cash borrowed on note: Date Accounts Post Ref...

5th Edition

ISBN: 9780134728643

Author: Robert Kemp; Jeffrey Waybright

Publisher: Pearson Education (US)

See similar textbooks

Concept explainers

Reporting Cash Flows

Reporting of cash flows means a statement of cash flow which is a financial statement. A cash flow statement is prepared by gathering all the data regarding inflows and outflows of a company. The cash flow statement includes cash inflows and outflows fro…

Balance Sheet

A balance sheet is an integral part of the set of financial statements of an organization that reports the assets, liabilities, equity (shareholding) capital, other short and long-term debts, along with other related items. A balance sheet is one of the …

Financial Statements

Financial statements are written records of an organization which provide a true and real picture of business activities. It shows the financial position and the operating performance of the company. It is prepared at the end of every financial cycle. It…

Owner's Capital

Before we begin to understand what Owner’s capital is and what Equity financing is to an organization, it is important to understand some basic accounting terminologies. A double-entry bookkeeping system Normal account balances are those which are expect…

Videos

Question

Chapter 2, Problem 24BE

To determine

Prepare the journal entries for the given transactions.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Chapter 2, Problem 23BE

Chapter 2, Problem 25BE

Students have asked these similar questions

Please given correct answer general accounting

Do fast answer of this accounting questions

Don't use ai given answer accounting questions

Chapter 2 Solutions

Financial Accounting

Ch. 2 - The order in which assets were listed and...Ch. 2 - Prob. 2DQ Ch. 2 - How is revenue related to retained earnings?Ch. 2 - Prob. 4DQ Ch. 2 - Prob. 5DQ Ch. 2 - Prob. 6DQ Ch. 2 - Prob. 7DQ Ch. 2 - Distinguish between journalizing and posting.Ch. 2 - True or false: If the trial balance is in balance,...Ch. 2 - When it is time to prepare the financial...

Ch. 2 - Which sequence of actions correctly summarizes the...Ch. 2 - Prob. 2SC Ch. 2 - Prob. 3SC Ch. 2 - Prob. 4SC Ch. 2 - Prob. 5SC Ch. 2 - Which journal entry records obtaining a bank loan...Ch. 2 - RV Wholesale, Inc., paid 1,200 for supplies and...Ch. 2 - Prob. 8SC Ch. 2 - Prob. 9SC Ch. 2 - Prob. 10SC Ch. 2 - Prob. 11SC Ch. 2 - Prob. 12SC Ch. 2 - Prob. 1SE Ch. 2 - Prob. 2SE Ch. 2 - Prob. 3SE Ch. 2 - Prob. 4SE Ch. 2 - Accounting terminology (Learning Objectives 2, 3, ...Ch. 2 - Effects of debits and credits on accounts...Ch. 2 - Balancing accounts and normal balances (Learning...Ch. 2 - Types of accounts and effects of debits and...Ch. 2 - Re-creating journal entries from T-account...Ch. 2 - Journalizing transactions (Learning Objective 3)...Ch. 2 - Prob. 11SE Ch. 2 - Prob. 12SE Ch. 2 - Prob. 13SE Ch. 2 - Accounting terminology (Learning Objectives 1, 2,...Ch. 2 - Prob. 15AE Ch. 2 - Journalizing transactions (Learning Objective 3)...Ch. 2 - Prob. 17AE Ch. 2 - Balancing accounts and preparing a trial balance...Ch. 2 - Prob. 19AE Ch. 2 - Prob. 20AE Ch. 2 - Prob. 21AE Ch. 2 - Prob. 22AE Ch. 2 - Prob. 23BE Ch. 2 - Prob. 24BE Ch. 2 - Prob. 25BE Ch. 2 - Balancing accounts and preparing a trial balance...Ch. 2 - Recording transactions and preparing a trial...Ch. 2 - Prob. 28BE Ch. 2 - Prob. 29BE Ch. 2 - Prob. 30BE Ch. 2 - Prob. 31AP Ch. 2 - Prob. 32AP Ch. 2 - Journalizing, posting, and preparing a trial...Ch. 2 - Prob. 34AP Ch. 2 - Preparing a trial balance, income statement,...Ch. 2 - Prob. 36AP Ch. 2 - Prob. 37BP Ch. 2 - Prob. 38BP Ch. 2 - Prob. 39BP Ch. 2 - Prob. 40BP Ch. 2 - Prob. 41BP Ch. 2 - Prob. 42BP Ch. 2 - Prob. 1CE Ch. 2 - Prob. 1CP Ch. 2 - Prob. 1CFSAP Ch. 2 - Prob. 1EIA Ch. 2 - Prob. 2EIA Ch. 2 - Prob. 1FA Ch. 2 - Prob. 1IA Ch. 2 - Prob. 1SBA Ch. 2 - Prob. 1WC

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Prepare the journal entries for the given transactions.

Solution Summary: The author explains the rules of debiting and crediting different accounts while they occur in business transactions.

Concept explainers

Videos

Prepare the journal entries for the given transactions.

Want to see the full answer?

Chapter 2 Solutions