Journal Entry Bootcamp

Introduction

• Purpose: Practice and understand journal entries in accounting.
• Target Audience: People familiar with journal entries who need more practice.
• Importance: Students often struggle with journal entries, which can lead to failure in accounting courses.
• Key Rule: Actively practice by pausing and attempting each journal entry question.

Basic Principles of Journal Entries

• Assets
  • Increase: Debit
  • Decrease: Credit
• Liabilities and Equity
  • Increase: Credit
  • Decrease: Debit
• Revenues, Expenses, and Dividends
  • Revenues increase equity: Credit
  • Expenses and Dividends decrease equity: Debit

Practice Problems

August 1st

• Transaction: Borrow $50,000 from bank, signed note payable.
• Journal Entry:
  • Debit: Cash $50,000
  • Credit: Note Payable $50,000

August 2nd

• Transaction: Purchase landscaping equipment for $10,000 cash.
• Journal Entry:
  • Debit: Equipment $10,000
  • Credit: Cash $10,000

August 3rd

• Transaction: Paid $100 to repair lawnmower.
• Journal Entry:
  • Debit: Repair Expense $100
  • Credit: Cash $100

August 4th

• Transaction: Provided landscaping service, received $75 cash.
• Journal Entry:
  • Debit: Cash $75
  • Credit: Landscaping Revenue $75

August 5th

• Transaction: Used $150 fuel for lawnmowers, paid cash.
• Journal Entry:
  • Debit: Fuel Expense $150
  • Credit: Cash $150

August 6th

• Transaction: Provided service to three customers, $100 each, two paid cash.
• Journal Entry:
  • Debit: Cash $200, Accounts Receivable $100
  • Credit: Landscaping Revenue $300

August 7th

• Transaction: Received but did not pay $50 phone bill.
• Journal Entry:
  • Debit: Telephone Expense $50
  • Credit: Accounts Payable $50

August 8th

• Transaction: Purchased equipment for $500 on account.
• Journal Entry:
  • Debit: Equipment $500
  • Credit: Accounts Payable $500

August 9th

• Transaction: Paid $200 for social media advertising.
• Journal Entry:
  • Debit: Advertising Expense $200
  • Credit: Cash $200

August 10th

• Transaction: Completed job, billed $2,000, payment due in 30 days.
• Journal Entry:
  • Debit: Accounts Receivable $2,000
  • Credit: Landscaping Revenue $2,000

August 11th

• Transaction: Collected $100 from a previous job.
• Journal Entry:
  • Debit: Cash $100
  • Credit: Accounts Receivable $100

August 12th

• Transaction: Completed job, billed $4,500, collected half.
• Journal Entry:
  • Debit: Cash $2,250, Accounts Receivable $2,250
  • Credit: Landscaping Revenue $4,500

August 13th

• Transaction: Paid $400 electricity bill.
• Journal Entry:
  • Debit: Utilities Expense $400
  • Credit: Cash $400

August 14th

• Transaction: Bought trailer for $1,200 cash.
• Journal Entry:
  • Debit: Trailer $1,200
  • Credit: Cash $1,200

August 15th

• Transaction: Paid $2,000 in wages.
• Journal Entry:
  • Debit: Wages Expense $2,000
  • Credit: Cash $2,000

August 16th

• Transaction: $600 lawnmower repair, payment due in 30 days.
• Journal Entry:
  • Debit: Repair Expense $600
  • Credit: Accounts Payable $600

August 17th

• Transaction: Paid $50 phone bill from Aug 7th.
• Journal Entry:
  • Debit: Accounts Payable $50
  • Credit: Cash $50

August 18th

• Transaction: Collected $2,250 from Aug 12th job.
• Journal Entry:
  • Debit: Cash $2,250
  • Credit: Accounts Receivable $2,250

August 19th

• Transaction: Judy Smith invested $25,000 for common shares.
• Journal Entry:
  • Debit: Cash $25,000
  • Credit: Common Shares $25,000

August 20th

• Transaction: Rented tools for $350 cash.
• Journal Entry:
  • Debit: Tool Rental Expense $350
  • Credit: Cash $350

August 21st

• Transaction: Completed special job, paid $1,800.
• Journal Entry:
  • Debit: Cash $1,800
  • Credit: Landscaping Revenue $1,800

August 22nd

• Transaction: Paid $400 legal fees.
• Journal Entry:
  • Debit: Legal Fees Expense $400
  • Credit: Cash $400

August 23rd

• Transaction: Took business training course, paid $180.
• Journal Entry:
  • Debit: Training Expense $180
  • Credit: Cash $180

August 24th

• Transaction: Purchased leaf blower on account, $275.
• Journal Entry:
  • Debit: Equipment $275
  • Credit: Accounts Payable $275

August 25th

• Transaction: Completed mowing work, billed $400, received $150.
• Journal Entry:
  • Debit: Cash $150, Accounts Receivable $250
  • Credit: Landscaping Revenue $400

August 26th

• Transaction: Received business license bill, $240, not paid.
• Journal Entry:
  • Debit: Business License Fee Expense $240
  • Credit: Accounts Payable $240

August 27th

• Transaction: Collected $2,000 from Aug 10th job.
• Journal Entry:
  • Debit: Cash $2,000
  • Credit: Accounts Receivable $2,000

August 28th

• Transaction: Paid $600 lawnmower repair bill from Aug 16th.
• Journal Entry:
  • Debit: Accounts Payable $600
  • Credit: Cash $600

August 29th

• Transaction: Paid $2,000 in wages.
• Journal Entry:
  • Debit: Wages Expense $2,000
  • Credit: Cash $2,000

August 30th

• Transaction: Paid $250 interest on note.
• Journal Entry:
  • Debit: Interest Expense $250
  • Credit: Cash $250

August 31st

• Transaction: Declared and paid $1,000 dividend.
• Journal Entry:
  • Debit: Dividends $1,000
  • Credit: Cash $1,000

Conclusion

• Practice is essential for mastering journal entries in accounting.
• Follow the structured approach to determine the correct debit and credit for each transaction.