Debits and Credits
Double-entry accounting system
- 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 another.
- DEBITS must equal CREDITS.
Bob Sample opened the Campus Laundromat on
- Invested $20,000 cash in the business.
- Paid $1,000 cash for store rent for the month of September.
- Purchased washers and dryers for $25,000, paying $10,000 in cash and signing a $15,000, 6-month, 12% note payable.
- Paid $1,200 for one-year accident insurance policy.
10. Received bill from the Daily News for advertising the opening of the Laundromat $200.
20. Withdrew $700 cash for personal use.
30. Determined that cash receipts for laundry services for the month were $6,200.
(a) Journalize the September transactions. (Use J1 for the journal page number.)
(b) Open ledger accounts and post the September transactions.