Explanation Journal entry : Journal is the primary record of the business transaction in chronological (date wise) order. Journal entry contains two effects one is debit and other is credit, under double entry book keeping system. Procedure for debiting and crediting an account: Increase in assets account, increase in expenses account, and decrease in liabilities account should be debited. Decrease in assets account, increase in revenue account, and increase in liabilities account should be credited. All transactions affect the accounting equation that is displayed below. The accounting equation should always remain in balance at the time of recording a business transaction: Prepare the journal entries as shown below. a. Purchase of office equipment with cash $30,000: Date Particulars Debit ($) Credit ($) - Equipment $30,000 Cash $30,000 (To record the purchase of equipment) Table 1 Explanation: Purchase of equipment is debited, as it increases the asset account. Cash is credited, as it decreases the asset account. b. Purchase of supplies on credit: Date Particulars Debit ($) Credit ($) - Supplies $15,000 Account payable $15,000 (To record the purchase of supplies on credit) Table 2 Explanation: Purchase of suppliesis debited, as it increases the asset account. Account payableis credited, as it increases the liability account. c. Selling of goods for cash $40,000: Date Particulars Debit ($) Credit ($) - Cash $40,000 Sales revenue $40,000 (To record the cost of goods sold) Table 3 Explanation: Cash received from the selling of goodsis debited, as it increases the asset account. Sales revenueis credited, as it increases the revenue account. d. Purchase of raw material from supplier on account: Date Particulars Debit ($) Credit ($) - Raw material inventory $22,000 Accounts payable $22,000 (To record the purchase of raw material on account) Table 4 Explanation: Raw material inventory is debited, as it increases the asset account. Accounts payable is credited, as it increases the liability account. e. Sales of goods to customer: Date Particulars Debit ($) Credit ($) - Accounts receivable $65,000 Sales $65,000 (To record the purchase of raw material on account) Table 5 Explanation: Accounts receivable is debited, as it increases the asset account, once the cash is received from customers...

3rd Edition

ISBN: 9780137391707

Author: GORDON

Publisher: PEARSON

See similar textbooks

Concept explainers

The Effect Of Prepaid Taxes On Assets And Liabilities

Many businesses estimate tax liability and make payments throughout the year (often quarterly). When a company overestimates its tax liability, this results in the business paying a prepaid tax. Prepaid taxes will be reversed within one year but can resu…

Final Accounts

Financial accounting is one of the branches of accounting in which the transactions arising in the business over a particular period are recorded.

Ledger Posting

A ledger is an account that provides information on all the transactions that have taken place during a particular period. It is also known as General Ledger. For example, your bank account statement is a general ledger that gives information about the a…

Trial Balance and Final Accounts

In accounting we start with recording transaction with journal entries then we make separate ledger account for each type of transaction. It is very necessary to check and verify that the transaction transferred to ledgers from the journal are accurately…

Adjustment Entries

At the end of every accounting period Adjustment Entries are made in order to adjust the accounts precisely replicate the expenses and revenue of the current period. It is also known as end of period adjustment. It can also be referred as financial repor…

Videos

Question

Chapter 4, Problem 4.2E

To determine

To prepare: Thejournal entries for the given transactions.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Chapter 4, Problem 4.1E

Chapter 4, Problem 4.3E

Students have asked these similar questions

This is general accounting problem please answer me fast

Account Question answer wanted.

Help this answer accounting question

Chapter 4 Solutions

INTERMEDIATE ACCT.-MYLAB COMBO ACCESS

Ch. 4 - Prob. 4.1Q Ch. 4 - ShoeBuy uses reversing entries for events such as...Ch. 4 - What is equity? What are the three components of...Ch. 4 - Prob. 4.4Q Ch. 4 - Will all transactions have a dual effect on the...Ch. 4 - Prob. 4.6Q Ch. 4 - What is meant by the term normal balance? Provide...Ch. 4 - Why is the general journal referred to as the book...Ch. 4 - Are account balances found in the general ledger?...Ch. 4 - What is the purpose of an unadjusted trial...

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.

Thejournal entries for the given transactions.

Solution Summary: The author explains that journal entries are the primary record of the business transaction in chronological (date wise) order.

Concept explainers

Videos

To prepare: Thejournal entries for the given transactions.

Want to see the full answer?

Chapter 4 Solutions