![]() To REFLECT on your experience and its connections with your life, learning, and your decisions for action.To RECORD your experience and save it if you forget the crucial details.Remember that accounting skills require mastery of concepts and practice.Email: Keeping Internship Journals Why Keep a Journal? If not, then you can always go back to the examples above. You should be getting the hang of it by now. In actual practice, different payroll accounting methods are applied.) 31 Salaries Expense 3,500.00 Cash 3,500.00 ( Note: This is a simplified entry to present the payment of salaries. Transaction #15: On December 31, the company paid salaries to its employees, $3,500.įor this transaction, we will record/increase the expense account by debiting it and decrease cash by crediting it. We will record it by crediting the liability account – Loans Payable. Transaction #14: On December 30, the company acquired a $12,000 short-term bank loan the entire amount plus a 10% interest is payable after 1 year.Īgain, the company received cash so we increase it by debiting Cash. Again, we will record the expense by debiting it and decrease cash by crediting it. Transaction # 13: On December 29, the company paid rent for December, $ 1,500. And, we will record withdrawals by debiting the withdrawal account – Mr. We will decrease Cash since the company paid Mr. Transaction #12: On December 25, the owner withdrew cash due to an emergency need. The entry would be: 20 Accounts Payable 500.00 Cash 500.00Īccounts payable would now have a credit balance of $1,000 ($1,500 initial credit in transaction #5 less $500 debit in the above transaction). Then, we will credit cash to decrease it as a result of the payment. To record this transaction, we will debit Accounts Payable for $500 to decrease it by the said amount. The company paid $500 of the $1,500 payable. Transaction #11: On December 23, the company paid some of its liability in transaction #5 by issuing a check. ![]() 17 Cash 4,250.00 Accounts Receivable 4,250.00Īctually, we simply transferred the amount from receivable to cash in the above entry. We are reducing the receivable since it has already been collected. Then, we will credit accounts receivable to decrease it. We will record an increase in cash by debiting it. Transaction #10: On December 22, the company collected from the customer in transaction #7. As per agreement, the $3,400 amount due will be collected after 30 days. Transaction #9: Rendered services to a big corporation on December 15. ![]() increase cash and increase the capital account of the owner. The entry would be similar to what we did in transaction #1, i.e. Gray invested an additional $3,200.00 into the business. In this transaction, the services have been fully rendered (meaning, we made an income we just haven't collected it yet.) Hence, we record an increase in income and an increase in a receivable account. Under the accrual basis of accounting, income is recorded when earned. As per agreement with the customer, the amount is to be collected after 10 days. Transaction #7: On December 12, the company rendered services on account, $4,250.00. We will then record an increase in cash (debit the cash account) and increase in income (credit the income account). Transaction #6: On December 9, the company received $1,900 for services rendered. By the terms "on account", it means that the amount has not yet been paid and so, it is recorded as a liability of the company. The company received supplies thus we will record a debit to increase supplies. Transaction #5: Also on December 7, Gray Electronic Repair Services purchased service supplies on account amounting to $1,500. There is an increase in an asset account ( debit Service Equipment, $16,000), a decrease in another asset ( credit Cash, $8,000, the amount paid), and an increase in a liability account ( credit Accounts Payable, $8,000, the balance to be paid after 60 days). This will result in a compound journal entry. The company paid a 50% down payment and the balance will be paid after 60 days. Transaction #4: On December 7, the company acquired service equipment for $16,000. There is an increase in an asset account (Furniture and Fixtures) in exchange for a decrease in another asset (Cash). Transaction #3: On December 6, the company acquired tables, chairs, shelves, and other fixtures for a total of $3,000.
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