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. The journal entries for given transactions are as follows: 1. Payment of employees’ salaries: Date Accounts title and explanation Post Ref. Debit ($) Credit ($) Salaries expense 500 Cash 500 (To record salaries paid to employees) Table (1) Following is the rule of debit and credit of above transaction: Salaries expense is an expense account. Expenses decrease the stockholders’ equity amount. Therefore, debit salaries expense account with $600. Cash is an asset account and is decreased because the salaries expense is paid. Therefore, credit cash account with $600. 2. Purchase of equipment with credit card: Date Accounts title and explanation Post Ref...

4th Edition

ISBN: 9781259307959

Author: J. David Spiceland, Wayne M Thomas, Don Herrmann

Publisher: McGraw-Hill Education

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So, before coming to the topic of cash books, I will let you briefly explain about the cash so that you all can be familiar with the word cash. Cash comes under the category of the current asset which is used as a medium of exchange for all the financial…

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Chapter 4, Problem 4.6BE

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To record: The journal entries for given transactions.

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To record: The journal entries for given transactions.

Solution Summary: The author explains that journal records the debit and credit aspects of each transaction to abide by the double-entry system.

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