Accounting Journal Entries Examples
The first step in accounting is to record the entries in journal book.
Before going to explain how these Journal Entries are passed you must read Debit and Credit Rules.
The following practical example helps you to understand that how we pass journal entries in journal book or daily book or day to day book.
The following Accounting Journal Entries Examples that show how to record journal entries:
Accounting Journal Entries Examples:
A Company “Haseeb & Co” was incorporated on January 1, 2014 with an initial capital of 5,000 shares of common stock having Rs.20 par value. During the first month of its operations, the company engaged in following transactions.
| Date | Transaction |
| Jan 2 | An amount of Rs.36,000 was paid as advance rent for three months. |
| Jan 3 | Paid Rs.60,000 cash on the purchase of equipment costing Rs.80,000.The remaining amount was recognized as a one year note payable with interest rate of 9%. |
| Jan 4 | Purchased office supplies costing Rs.17,600 on account. |
| Jan 13 | Provided services to its customers and received Rs.28,500 in cash. |
| Jan 13 | Paid the accounts payable on the office supplies purchased on January 4. |
| Jan 14 | Paid wages to its employees for first two weeks of January, aggregating Rs.19,100. |
| Jan 18 | Provided Rs.54,100 worth of services to its customers.They paid Rs.32,900 and promised to pay the remaining amount. |
| Jan 23 | Received Rs.15,300 from customers for the services provided on January 18. |
| Jan 25 | Received Rs.4,000 as an advance payment from customers. |
| Jan 26 | Purchased office supplies costing Rs.5,200 on account. |
| Jan 28 | Paid wages to its employees for the third and fourth week of January: Rs.19,100. |
| Jan 31 | Paid Rs.5,000 as dividends. |
| Jan 31 | Received electricity bill of Rs.2,470. |
| Jan 31 | Received telephone bill of Rs.1,494. |
| Jan 31 | Miscellaneous expenses paid during the month totaled Rs.3,470 |
The following table shows the journal entries for the above events.
General Journal
Haseeb & Co
Dated: January,2014
| Date | Account | Debit | Credit |
| Jan 1 | Cash | 100,000 | |
| Capital a/c | 100,000 | ||
| Jan 2 | Prepaid Rent | 36,000 | |
| Cash | 36,000 | ||
| Jan 3 | Equipment | 80,000 | |
| Cash | 60,000 | ||
| Notes Payable | 20,000 | ||
| Jan 4 | Office Supplies | 17,600 | |
| Accounts Payable | 17,600 | ||
| Jan 13 | Cash | 28,500 | |
| Service Revenue | 28,500 | ||
| Jan 13 | Accounts Payable | 17,600 | |
| Cash | 17,600 | ||
| Jan 14 | Wages Expense | 19,100 | |
| Cash | 19,100 | ||
| Jan 18 | Cash | 32,900 | |
| Accounts Receivable | 21,200 | ||
| Service Revenue | 54,100 | ||
| Jan 23 | Cash | 15,300 | |
| Accounts Receivable | 15,300 | ||
| Jan 25 | Cash | 4,000 | |
| Unearned Revenue | 4,000 | ||
| Jan 26 | Office Supplies | 5,200 | |
| Accounts Payable | 5,200 | ||
| Jan 28 | Wages Expense | 19,100 | |
| Cash | 19,100 | ||
| Jan 31 | Dividends | 5,000 | |
| Cash | 5,000 | ||
| Jan 31 | Electricity Expense | 2,470 | |
| Utilities Payable | 2,470 | ||
| Jan 31 | Telephone Expense | 1,494 | |
| Utilities Payable | 1,494 | ||
| Jan 31 | Miscellaneous Expense | 3,470 | |
| Cash | 3,470 |
After Passing the journal entries in general journal book the next step is to prepare ledger accounts.
