I have to put the following things in a first month General Journal. I\'m comple
ID: 2356195 • Letter: I
Question
I have to put the following things in a first month General Journal. I'm completely lost
Oct 1 Began business by making a deposit in a copmany bank account of $12,000, in exchange for 1,200 shares of $10 per value common stock.
Oct 1 Paid the premium on a one-year insurance policy, $1,200.
Oct 1 Paid the current month's rent, $1,040.
Oct 3 Purchased repoair equipment for Conklin Company, $4,400. Paid $600 down and the balance was placed on account. Payments will be $200.00 per month for nineteen months. The first payment is due 11/1, Note: Use Accounts Payable for the Balance Due.
Oct. 8 Puchased repair supplies from Mckenna COmpany on credit, $390.
Oct 12 Paid utility bill for October, $514.
Oct 16 Cash bicycle repair revenue for the first half of October, #1362.
Oct 19 Made payment to McKenna Company, $200.
Oct 31 Cash bicycle repair revenue for the last half of October, $1,310.
Oct 31 Declared and paid cash dividend of $800.
I'm lost and don't know the differents from credit to debits. if someone has a spead sheet of this info I'd be greatly appriciated. thanks
Explanation / Answer
First of all, the accounting equation: Assets = Liabilities + Equity Can also be expanded to: Assets = Liabilities + equity + revenue – expense + gains – losses Or Assets + expense + losses = Liabilities + revenue + gains Everything on the left (assets, expenses, losses) are increased by debits and decreased by credits. Everything on the right (liabilities, revenues, gains) are increased by credits and decreased by debits – the exact opposite. Oct 1 Began business by making a deposit in a copmany bank account of $12,000, in exchange for 1,200 shares of $10 per value common stock. Debit Cash 12,000 (increase an asset account is debited) Credit Common stock 12,000 (Increase an equity account is credited) Oct 1 Paid the premium on a one-year insurance policy, $1,200. Debit prepaid insurance 1,200 (asset account – increased by debit) Credit cash 1,200 (asset account – decreased by credit) Oct 1 Paid the current month's rent, $1,040. Debit rent expense 1040 (expense account increased by debit) Credit cash 1040 (asset account decreased by credit) Oct 3 Purchased repoair equipment for Conklin Company, $4,400. Paid $600 down and the balance was placed on account. Payments will be $200.00 per month for nineteen months. The first payment is due 11/1, Note: Use Accounts Payable for the Balance Due Debit equipment 4400 (increase in asset is debited) Credit cash 600 (decrease in asset is credtited) Credit accounts payable 3800 (increased in liability account is credited) Oct. 8 Puchased repair supplies from Mckenna COmpany on credit, $390. Debit repair supplies 390 (increase in asset is debited) Credit accounts payable 390 (Increase in liability is credited) Oct 12 Paid utility bill for October, $514. Debit utility expense 514 (incease in expense is debited) Credit cash 514 (decrease in asset is credited) Oct 16 Cash bicycle repair revenue for the first half of October, #1362. Debit cash 1362 (increase in asset is debited) Credit revenue 1362 (increase in revenue is credited) Oct 19 Made payment to McKenna Company, $200. Debit accounts payable 200 (decrease liability is debit) Creidt cash 200 (decrease asset is credit) Oct 31 Cash bicycle repair revenue for the last half of October, $1,310. Debit cash 1310 (increase in asset is debit) Credit revenue 1310 (increase in revenue is credit) Oct 31 Declared and paid cash dividend of $800. Debit Retained Earnings 800 (Decrease equity account is a debit) Credit cash 800 (decrease in asset is credit)