AGEC $160$ Assignment related to Agricultural Accounting.

Assume that your family owns a farm. The farm completed the following transactions during the year. Make a journal.

Jan $1$: Provided the farm with capital in form of cash $$100,000$ and farm equipment $$20,000.$

Feb $20$: Purchased a farm equipment and paid cash of $$40,000.$

Feb $30$: Purchased land worth $$200,000.$ Paid $$20,000$ and signed notes payable for $5$ years for the remaining balance.

March $5$: Purchased seed and fertilizer for $$10,000.$

May $20$: Purchased office equipment for $$2,400.$

May $29$: Paid rent for $$1,000.$

June $2$: Received non$-$farm income $$1,200$ and invested it in the farm business.

July $1$: Sold crops; $$100,000$ in cash and $$20,000$ on credit.

July $20$: Paid $$1,000$ as annual premium on property insurance.

August $10$: Received cash of $$35,000$ from selling livestock.

August $30$: Payroll expenses of $$3,000$ as a gross amount $($the net cash payment to farm employees is $$2,500$ and the Tax Payable is $$500).$

September $21$: Withdraw cash for personal use $$500.$

October $10$: Paid $$1,500$ towards the notes payable signed on Feb $20.$ $$500$ is interest.

Remember:

For each transaction, at least TWO accounts MUST be used. One is DEBITED, another is CREDITED for the same amount $($Debit $=$ Credit$).$

When "Asset and expense" accounts increase, we DEBIT. When they decrease we CREDIT.

When "Liability, equity, and revenue" accounts increase, we CREDIT. When they decrease we DEBIT.