1. Journal Entries – lots of transactions…. Judith Paquette
Acct 201
Journal Entries – lots of transactions….
Judith Paquette

2. Objectives Journal Entries T – Accounts Trial Balance
Financial Statements
Adjustments
T-Accounts
Final Financial Statements
Closing Entries
Post Closing Trial Balance

3. The T Account – one per Account
Shows Debits and Credits
Debit = LEFT
Credit = RIGHT
Tracks each account’s activity (increases and decreases)
Each transaction must affect two or more accounts to keep the basic accounting equation in balance.
Recording done by debiting at least one account and crediting at least one other.
DEBITS must equal CREDITS.

4. Rules of Debit and Credit
BALANCE SHEET
INCOME STATEMENT
RETAINED EARNINGS
DEBIT
CREDIT
To increase
Assets
= Liab
+ Stk Equity
+Revenue
- Expense
- Dividends
CASH
ACCTS PAYABLE
COMMON STOCK
SERVICE REVENUE
SALARY EXPENSE
DIVIDENDS
ACCTS RECEIV
NOTES PAYABLE
 SALES
ADVERTISING EXPENSE
SUPPLIES
UNEARNED REVENUE
SUPPLIES EXPENSE
PREPAID RENT
SALARIES PAYABLE
TELEPHONE EXPENSE
PREPAID INSURANCE
RENT EXPENSE
LAND
EQUIPMENT
DEPRECIATION EXPENSE
ACCUMULATED DEPRECIATION
INSURANCE EXPENSE
INCOME TAX EXPENSE

5. Let’s take a company
A Service Business – Emerald City Graphic Designers
The company was formed in 2013 with $75,000 from three investors in exchange for 75,000 shares of $1 common stock.
The company will rent a building, purchase art and office supplies, office and computer equipment, and then buy a year’s worth of insurance. Some purchases will be for cash, some on credit. Later, the company will pay some bills. Then, the company will provide graphic design service and be paid for it. It will then pay its employee. One customer will prepay for service to be performed in the future. Another customer will pay for service performed in the current month. It will receive a bill in the mail, but not pay it yet. And finally, it will pay a dividend.

6. Your Job….should you choose to accept it.
Create, with me, the Journal Entries for these transactions.
Then go on to complete the Accounting Cycle in the next videos.

7. #1 Emerald City Graphic Designers was formed in January 2, 2013 with $75,000 from three investors in exchange for 75,000 shares of $1 common stock. #
DATE
Account Titles AND Description
Debit
Credit 1

8. #1 Emerald City Graphic Designers was formed in January 2, 2013 with $75,000 from three investors in exchange for 75,000 shares of $1 common stock. #
DATE
Account Titles AND Description
Debit
Credit 1
1/2/14
Cash
75,000
Common Stock
To record owners’ investment.

9. #2 On January 2, 2014, Emerald City Graphic Designers rents an office, paying four (4) months rent in advance. Monthly rent is $1,100 (okay, they are a LONG way from Seattle!) #
DATE
Account Titles AND Description
Debit
Credit 2
1/2/14

10. #2 On January 2, 2014, Emerald City Graphic Designers rents an office, paying four(4) months rent in advance. Monthly rent is $1,100 (okay, they are a LONG way from Seattle!) #
DATE
Account Titles AND Description
Debit
Credit 2
1/2/14
Prepaid Rent
4,400
Cash
To record payment of rent in advance.
Alert: Will require an adjusting JE in future video as rent is used up.

11. #3 On January 4, Emerald City Graphic Designers purchased computer equipment costing $5,600, with 2,000 cash and the balance to be paid next month. #
DATE
Account Titles AND Description
Debit
Credit 3
1/4/14

12. #3 On January 4, Emerald City Graphic Designers purchased computer equipment costing $5,600, with 2,000 cash and the balance to be paid next month. #
DATE
Account Titles AND Description
Debit
Credit 3
1/4/14
Equipment
5,600
Cash
2,000
Accounts Payable
3,600
To purchase computer equipment
Alert: Will require an adjusting JE in future video to depreciation equipment

13. #4 Jan 5: Emerald City Graphic Designers ordered $800 of art supplies and $750 of office supplies.
DATE
Account Titles AND Description
Debit
Credit 4
1/5/14

14. #4 Jan 5: Emerald City Graphic Designers ordered $800 of art supplies and $750 of office supplies.
DATE
Account Titles AND Description
Debit
Credit 4
1/5/14
No entry

15. #5 Jan 5: Emerald City Graphic Designers purchased $800 of art supplies and $750 of office supplies from Dakota Art Stores, on credit. #
DATE
Account Titles AND Description
Debit
Credit 5
1/5/14

16. #5 Jan 5: Emerald City Graphic Designers purchased $800 of art supplies and $750 of office supplies from Dakota Art Stores, on credit. #
DATE
Account Titles AND Description
Debit
Credit 5
1/5/14
Supplies
1,550
Accounts Payable
Purchased Art Supplies (800) and Office supplies (750).
Alert: Will require an adjusting JE in future video as supplies are used up.

17. #6 January 5: Emerald City Graphic Designers takes out a 12% Note Payable in cash, at 12% interest.
DATE
Account Titles AND Description
Debit
Credit 6
1/5/14

18. #6 January 5: Emerald City Graphic Designers takes out a 12% Note Payable in cash, at 12% interest.
DATE
Account Titles AND Description
Debit
Credit 6
1/5/14
Cash
5,000
Notes Payable
To record receipt of cash for note.
Alert: Will require an adjusting JE in future video as supplies are used up.

19. #7 January 10: Emerald City Graphic Designers pays Dakota Art Stores for $800 of the money owed.
DATE
Account Titles AND Description
Debit
Credit 7
1/10/14

20. #7 January 10: Emerald City Graphic Designers pays Dakota Art Stores for $800 of the money owed.
DATE
Account Titles AND Description
Debit
Credit 7
1/10/14
Accounts Payable
800
Cash
To pay money owed from transaction #6

21. #8 January 11: Emerald City Graphic Designers creates an advertisement for auto repair shop, which runs in the newspaper. They are paid $1,300 in cash. #
DATE
Account Titles AND Description
Debit
Credit 8
1/11/13

22. #8 January 11: Emerald City Graphic Designers creates an advertisement for auto repair shop, which runs in the newspaper. They are paid $1,300 in cash. #
DATE
Account Titles AND Description
Debit
Credit 8
1/11/13
Cash
1,300
Service Revenue
To record advertisement revenue

23. #9 January 15: Emerald City Graphic Designers accepts an advance of $900 for design work to be done for Joe’s Organic Groceries by the next month or sooner. #
DATE
Account Titles AND Description
Debit
Credit 9
1/15/14

24. #9 January 15: Emerald City Graphic Designers accepts an advance of $900 for design work to be done for Joe’s Organic Groceries by the next month or sooner. #
DATE
Account Titles AND Description
Debit
Credit 8
1/15/14
Cash
900
Unearned Revenue
Advance from a customer
for Joe’s Organic Groceries by January 31
Alert: Will require an adjusting JE in future video after service is completed.

25. #10 January 19: Emerald City Graphic Designers creates and delivers advertising posters to Gengki Sushi. The fee, $4,700 is billed but not paid. #
DATE
Account Titles AND Description
Debit
Credit 10
1/19/14

26. #10 January 19: Emerald City Graphic Designers creates and delivers advertising posters to Gengki Sushi. The fee, $4,700 is billed but not paid. #
DATE
Account Titles AND Description
Debit
Credit 10
1/19/14
Accounts Receivable
4,700
Service Revenue
To record service provided and billed.

27. #11 January 29: Emerald City Graphic Designers pays its administrative assistant $3,600 for his four weeks’ salary. #
DATE
Account Titles AND Description
Debit
Credit 11
1/29/14

28. #11 January 29: Emerald City Graphic Designers pays its administrative assistant $3,600 for his four weeks’ salary. #
DATE
Account Titles AND Description
Debit
Credit 11
1/29/14
Salary Expense
3,600
Cash
To record payment of salary.

29. #12 January 30: Emerald City Graphic Designers receives, but does not pay, the telephone bill of $250. The bill is for service provided in January. #
DATE
Account Titles AND Description
Debit
Credit 12
1/30/14

30. #12 January 30: Emerald City Graphic Designers receives, but does not pay, the telephone bill of $250. The bill is for service provided in January. #
DATE
Account Titles AND Description
Debit
Credit 12
1/30/14
Telephone Expense
250
Cash
To record phone bill expense incurred.

31. #13 January 31: Emerald City Graphic Designers declared and paid a $600 dividend.
DATE
Account Titles AND Description
Debit
Credit 13
1/31/14

32. #13 January 31: Emerald City Graphic Designers declared and paid a $600 dividend.
DATE
Account Titles AND Description
Debit
Credit 13
1/31/14
Dividends
600
Cash
To pay dividend.

33. Here are some of the T accounts
Emerald City Graphic Designers
T accounts for Big Problem
T Accounts
Jan 1-31, 2014
CASH
Accounts Receivable
Supplies 1
75,000
4,400
4,700 5
1,550 8
1,300
2,000 3 9
900 6
5,000
800 7
3,600 11
250 12
600 13
70,550
Prepaid Rent 2
Equipment
Accumlated Deprec.
5,600
Notes Payable
Accounts Payable
Interest Payable
4,350
Unearned Revenue
Salaries Payable

34. Here are the rest of the T accounts
Common Stock
Retained Earnings
Dividends
75,000 1 12
600
Service Revenue
Salaries Expense
Telephone Exp
1,300
3,600 11
250
4,700 9
6,000

35. Accumulated Depreciation Notes Payable Accounts Payable
Emerald City Graphic Designers
TRIAL BALANCE - before adjustments
As of: January 31, 2014
Account
Debit
Credit
Cash
$70,550
Accounts Receivable
4,700
Advertising Supplies
1,550
Prepaid Rent
4400
Prepaid Insurance
Equipment
5,600
Accumulated Depreciation
Notes Payable
5,000 
Accounts Payable
4,350
Interest Payable
Unearned Revenue
900
Salaries Payable
Common Stock
75,000
Retained Earnings
Dividends
600
Service Revenue
6,000
Salaries Expense
3,600
Telephone Expense
250
Supplies Expense
Rent Expense
Insurance Expense
Interest Expense
Depreciation Expense
$91,250

36. End of Journal Entries Next video: ADJUSTMENTS!