Chapter C, Problem 16QS

To determine

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:

$\boxed{\text{Asset = Liabilities + Stockholders' equity}}$

To prepare: The journal entries to record the sale and the receipt of the payment in pounds.