Question
Part 1: Prepare a General Journal entry for the following transaction: On December 17, On Your Mark paid $1,500 to Keystone Insurance Company toward the
Part 1: Prepare a General Journal entry for the following transaction: On December 17, On Your Mark paid $1,500 to Keystone Insurance Company toward the premium for a six-month insurance policy, check No. 1001. Part 2: Record the following transactions in the appropriate journal. Create appropriate dates for all transactions. You are the owner of a store. You purchase items worth $7,800 on account from your main supplier. Most of the purchase is inventory for resale, but also includes office supplies worth $100. Make the following entry in your Purchases Journal:
Debit | Credit | |
Purchases | $7,700 | |
Office supplies expense | $100 | |
Accounts payable | $7,800 |
Next month, after receiving a statement from your supplier, you write a check to settle your account. Make the following entry in your Cash Payments Journal:
Debit | Credit | |
Accounts payable | $7,800 | |
Cash | $7,800 |
Assume that your business is a retail store that sells merchandise for resale. Here is an example of a few entries in a Purchases Journal. The following transactions occurred:
(Note: All dollar amounts have been rounded off to the nearest dollar.)
- On February 2, you paid an electricity bill of $177.
- Also on February 2, you bought merchandise inventory on account from Ash Wholesale at a cost of $9,500.
- On February 5, you spent $82 at Atkins Service Station to fill up your delivery vehicles with gas. You charged it all to the account you maintain with Atkins.
- On February 8, you write a check for $9,500 in payment of the bill you receive from Ash Wholesale.
- On February 10, you write a check for $82 to Atkins Service Station to settle your account there.
Upon completion of this journal page, you should foot all the seven amount columns. Guidelines:
- Check that all entries were recorded correctly, as you are using a double-entry accounting system.
- Check to see if the sum of the debits equals the sum of the credits. Total debits: 0 + 9,582 + 9,500 + 82 + 177 = 19,341. Total credits: 9,759 + 9,582 = 19,341.
- If the sum of the debit columns does not equal the sum of the credit columns, identify where the problem has occurred.
- You may have entered one of the amounts in the wrong column.
- You may have added the totals incorrectly. It is usually easy to pinpoint the error because the debits should equal the credits for each transaction.
- Your purchases journal may have many more columns than this sample, because you probably will have more expense classifications.
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