Week 3: Journal Entries

Question 1

How do you log assets, liabilities, and equity in journal entries?

Answer 1

Asset (+debit/-credit)

Liabilities (-debit/+credit)

Equity (-debit/+credit)

Question 2

3 steps of accounting

Answer 2

1. Analyze the transactions (the pluses and minuses)
2. Make the journal entry (debits and credits)
3. Put those transactions into the T-accounts

Question 3

On November 1st, I am paid 6000 dollars to take care of a customer’s property over the next six months

Create a journal entry, then one for December 31

Answer 3

Question 4

paid 6000 dollars of rent in advance for 12 months on October 1st

Create a journal entry, then one for December 31

Answer 4

*rent expense is not actually stockholder’s equity, rather an expense. Like assets, expenses are debited

Question 5

I get a phone bill for 1000 dollars but do not pay it immediately

Create a journal entry, then one for when you pay the bill

Answer 5