Julia F. answered • 11/02/22
Financial/ Managerial Accounting, Finance, and Quickbooks Tutor
4/1/22 Debit cash (not sure of the correct amount due to comma spacing provided), credit owner's equity or capital account for the same amount. I think its 120,000.
4/3/22 Debit furniture, credit cash for 24,000
4/4/22 This could be either one of two different journal entries, depending on how the company records its inventory. Looking forward at the transactions, there is no cost of goods sold information (which would be needed for perpetual inventory entries, so in this case I would assume the company uses periodic inventory. Assuming periodic inventory, the journal entry would be:
Debit purchases, credit cash (I assume) for 36,000.
4/5/22 This could be either just one journal entry, or two journal entries depending on how the company records its inventory. Again assuming the company uses periodic inventory, there would only be one journal entry:
Debit Sales Revenue, credit cash (I assume) for 4,800
4/7/22 Based on the transaction information we don't necessarily know how the company records its rent expense. If they record rent as being prepaid and then expense it at a later date with an adjusting entry, the journal entry would be:
Debit prepaid rent, credit cash for 3,000
However, if the company expenses rent when its paid, the journal entry would be:
Debit rent expense, credit cash for 3,000
As for posting the journal entries to the ledgers, each debit and credit most be posted to each account's separate individual ledger. As you post the journal entries in the ledgers, make sure to write the account number referenced in the PR (post reference) column in the general journal for each debit and credit. If your journal has this column, it will be to the right of the account names column and to the left of the debit column. The PR column is a checks and balances system which helps ensure every debit and every credit in the journal are in fact posted into the ledgers. If account numbers are unknown, skip this...just make sure you post them all. I recommend posting each debit and each credit as you make each journal entry...it's very easy to miss one if there are multiple journal entries written at once without posting in between. The following information is similar to what you would see in the ledgers:
Cash
Debit 120,000 Balance Debit 120,000
Credit 24,000 Balance Debit 96,000
Credit 36,000 Balance Debit 60,000
Debit 4,800 Balance Debit 64,800
Credit 3,000 Balance Debit 61,800
Owner's Equity (or Capital)
Credit 120,000 Balance Credit 120,000
Furniture
Debit 24,000 Balance Debit 24,000
Purchases
Debit 36,000 Balance Debit 36,000
Sales Revenue
Credit 4,800 Balance Credit 4,800
Prepaid Rent or Rent Expense
Debit 3,000 Balance Debit 3,000
***To test balance accuracy you can do a trial balance based on the ledger balances. This way you can double check that total debits equal total credits. I'm going to use rent expense as the account on my trial balance. If you were to use prepaid rent instead, it would be listed as a 3,000 debit balance right below cash.
Trial Balance
Account Debit Credit
Cash 61,800
Furniture 24,000
Owner's Equity (or Capital) 120,000
Sales Revenue 4,800
Purchases 36,000
Rent Expense 3,000
Totals 124,800 124,800
Our total debits equal our total credits!!!!
