📚 Journal Entries Learning Guide

Master 60+ journal entries across 5 categories — Assets, Liabilities, Equity, Revenue & Expenses. Each entry includes clear debit and credit examples.

Cash Receipt from Sales

Recording cash received from customer sales

Account	Debit	Credit
Cash	1,000
Sales Revenue		1,000

Purchase Equipment

Buying equipment with cash

Account	Debit	Credit
Equipment	5,000
Cash		5,000

Collection of Accounts Receivable

Receiving payment from a customer who owed money

Account	Debit	Credit
Cash	3,000
Accounts Receivable		3,000

Prepaid Insurance

Paying insurance premium in advance for 12 months

Account	Debit	Credit
Prepaid Insurance	2,400
Cash		2,400

Purchase Inventory

Buying merchandise inventory for resale with cash

Account	Debit	Credit
Inventory	4,500
Cash		4,500

Purchase Land

Acquiring land for business operations

Account	Debit	Credit
Land	50,000
Cash		20,000
Mortgage Payable		30,000

Bank Deposit

Depositing cash into the business bank account

Account	Debit	Credit
Bank	8,000
Cash		8,000

Purchase Vehicle on Credit

Buying a delivery vehicle with a down payment and note payable

Account	Debit	Credit
Vehicle	25,000
Cash		5,000
Notes Payable		20,000

Purchase Office Supplies

Buying office supplies for future use with cash

Account	Debit	Credit
Supplies	600
Cash		600

Petty Cash Fund Setup

Establishing a petty cash fund for small expenses

Account	Debit	Credit
Petty Cash	500
Cash		500

Trade-in of Old Equipment

Trading old equipment plus cash for new equipment

Account	Debit	Credit
Equipment (New)	12,000
Accumulated Depreciation	4,000
Equipment (Old)		8,000
Cash		8,000

Short-term Investment Purchase

Investing in marketable securities with cash

Account	Debit	Credit
Short-term Investments	10,000
Cash		10,000

Prepaid Rent

Paying rent in advance for the next 6 months

Account	Debit	Credit
Prepaid Rent	7,200
Cash		7,200

NSF Check (Bounced Check)

Customer's check was returned by the bank due to insufficient funds

Account	Debit	Credit
Accounts Receivable	1,500
Cash		1,500

Accounts Payable

Recording goods purchased on credit

Account	Debit	Credit
Inventory	2,000
Accounts Payable		2,000

Loan Payment

Paying off a portion of debt

Account	Debit	Credit
Long-term Debt	1,500
Cash		1,500

Unearned Revenue

Receiving advance payment from customer before delivering service

Account	Debit	Credit
Cash	4,000
Unearned Revenue		4,000

Loan Payment with Interest

Making a loan payment that includes both principal and interest

Account	Debit	Credit
Notes Payable	1,000
Interest Expense	200
Cash		1,200

Accrued Salaries

Recording wages earned by employees but not yet paid

Account	Debit	Credit
Salary Expense	3,500
Salaries Payable		3,500

Sales Tax Collected

Recording sales tax collected from customers owed to government

Account	Debit	Credit
Cash	1,150
Sales Revenue		1,000
Sales Tax Payable		150

Accrued Interest on Loan

Recording interest that has accumulated but is not yet due

Account	Debit	Credit
Interest Expense	600
Interest Payable		600

Warranty Liability

Estimating future warranty costs on products sold

Account	Debit	Credit
Warranty Expense	1,200
Warranty Liability		1,200

Payment of Accounts Payable

Paying a supplier for goods previously purchased on credit

Account	Debit	Credit
Accounts Payable	2,000
Cash		2,000

Mortgage Obtained

Receiving a long-term mortgage loan from a bank

Account	Debit	Credit
Cash	100,000
Mortgage Payable		100,000

Purchase Discount Taken

Paying supplier within discount period (2/10, n/30 terms)

Account	Debit	Credit
Accounts Payable	5,000
Cash		4,900
Purchase Discount		100

Payroll Tax Liability

Recording employer's payroll tax obligations

Account	Debit	Credit
Payroll Tax Expense	1,800
FICA Payable		900
Federal Unemployment Tax Payable		450
State Unemployment Tax Payable		450

Current Portion of Long-term Debt

Reclassifying the portion of long-term debt due within one year

Account	Debit	Credit
Long-term Debt	12,000
Current Portion of Long-term Debt		12,000

Owner Investment

Owner contributes capital to the business

Account	Debit	Credit
Cash	10,000
Capital Stock		10,000

Retained Earnings Close

Transferring net income to retained earnings

Account	Debit	Credit
Income Summary	5,000
Retained Earnings		5,000

Dividend Declaration

Declaring dividends to be paid to shareholders

Account	Debit	Credit
Retained Earnings	2,000
Dividends Payable		2,000

Dividend Payment

Paying the declared dividends to shareholders

Account	Debit	Credit
Dividends Payable	2,000
Cash		2,000

Stock Issuance at Premium

Issuing common stock above par value

Account	Debit	Credit
Cash	15,000
Common Stock		10,000
Paid-in Capital in Excess of Par		5,000

Owner Withdrawal

Owner withdraws cash for personal use (sole proprietorship)

Account	Debit	Credit
Owner's Drawings	1,500
Cash		1,500

Treasury Stock Purchase

Company buys back its own shares from the market

Account	Debit	Credit
Treasury Stock	8,000
Cash		8,000

Reissue Treasury Stock at Gain

Selling treasury stock for more than it was purchased for

Account	Debit	Credit
Cash	10,000
Treasury Stock		8,000
Paid-in Capital from Treasury Stock		2,000

Stock Split (Memo Entry)

Recording a 2-for-1 stock split — par value halved, shares doubled

Account	Debit	Credit
Memo: 2-for-1 stock split. 10,000 shares at $10 par become 20,000 shares at $5 par. No journal entry required — only a memorandum note.

Stock Dividend Declaration

Declaring a small stock dividend (less than 25% of outstanding shares)

Account	Debit	Credit
Retained Earnings	6,000
Common Stock Dividend Distributable		2,000
Paid-in Capital in Excess of Par		4,000

Close Revenue to Income Summary

Closing revenue accounts at period end

Account	Debit	Credit
Sales Revenue	50,000
Service Revenue	15,000
Income Summary		65,000

Close Expenses to Income Summary

Closing expense accounts at period end

Account	Debit	Credit
Income Summary	45,000
Salary Expense		24,000
Rent Expense		14,400
Utility Expense		3,600
Depreciation Expense		3,000

Sales Revenue (Accrual)

Recording sale even if payment not received yet

Account	Debit	Credit
Accounts Receivable	3,000
Sales Revenue		3,000

Service Revenue

Recording revenue from services rendered

Account	Debit	Credit
Cash	2,500
Service Revenue		2,500

Earned Unearned Revenue

Recognizing revenue previously received in advance after delivering the service

Account	Debit	Credit
Unearned Revenue	4,000
Service Revenue		4,000

Interest Revenue

Earning interest on bank deposits or loans given

Account	Debit	Credit
Cash	750
Interest Revenue		750

Rental Income

Receiving rent from tenants for property owned

Account	Debit	Credit
Cash	1,800
Rental Revenue		1,800

Gain on Sale of Asset

Selling equipment for more than its book value

Account	Debit	Credit
Cash	6,000
Accumulated Depreciation	2,000
Equipment		5,000
Gain on Sale of Asset		3,000

Sales Discount Allowed

Customer takes early payment discount (2/10, n/30 terms)

Account	Debit	Credit
Cash	4,900
Sales Discount	100
Accounts Receivable		5,000

Commission Revenue

Earning commission for acting as a sales agent

Account	Debit	Credit
Cash	3,500
Commission Revenue		3,500

Dividend Income

Receiving dividend income from investments in other companies

Account	Debit	Credit
Cash	1,200
Dividend Revenue		1,200

Sales Returns

Customer returns goods and receives a refund

Account	Debit	Credit
Sales Returns and Allowances	800
Cash		800

Subscription Revenue (SaaS)

Recognizing monthly subscription revenue from annual plan

Account	Debit	Credit
Unearned Subscription Revenue	500
Subscription Revenue		500

Royalty Revenue

Earning royalties from licensing intellectual property

Account	Debit	Credit
Cash	2,200
Royalty Revenue		2,200

Salary Expense

Recording employee wages

Account	Debit	Credit
Salary Expense	2,000
Cash		2,000

Depreciation Expense

Recording monthly equipment depreciation

Account	Debit	Credit
Depreciation Expense	500
Accumulated Depreciation		500

Utility Expense

Recording electricity and water bills

Account	Debit	Credit
Utility Expense	300
Cash		300

Rent Expense

Paying monthly office or store rent

Account	Debit	Credit
Rent Expense	1,200
Cash		1,200

Insurance Expense (Adjusting)

Recognizing one month of prepaid insurance as expense

Account	Debit	Credit
Insurance Expense	200
Prepaid Insurance		200

Supplies Expense

Recording office supplies consumed during the period

Account	Debit	Credit
Supplies Expense	350
Supplies		350

Advertising Expense

Paying for marketing and advertising campaigns

Account	Debit	Credit
Advertising Expense	800
Cash		800

Bad Debt Expense

Estimating uncollectible accounts receivable

Account	Debit	Credit
Bad Debt Expense	500
Allowance for Doubtful Accounts		500

Cost of Goods Sold

Recording the cost of inventory sold to customers

Account	Debit	Credit
Cost of Goods Sold	3,200
Inventory		3,200

Payroll with Deductions

Recording employee wages with tax withholdings and net pay

Account	Debit	Credit
Salary Expense	5,000
Federal Income Tax Payable		750
FICA Payable		383
Cash		3,867

Freight-in (Shipping Cost)

Paying shipping costs on purchased inventory (FOB Shipping Point)

Account	Debit	Credit
Freight-in	450
Cash		450

Loss on Sale of Asset

Selling equipment for less than its book value

Account	Debit	Credit
Cash	2,000
Accumulated Depreciation	3,000
Loss on Sale of Asset	1,000
Equipment		6,000

Repairs and Maintenance

Paying for routine equipment repair (not capitalized)

Account	Debit	Credit
Repairs & Maintenance Expense	900
Cash		900

Travel Expense

Recording employee business travel costs

Account	Debit	Credit
Travel Expense	1,500
Cash		1,500

Amortization of Intangible Asset

Recording periodic amortization of a patent

Account	Debit	Credit
Amortization Expense	1,000
Patent		1,000

Bank Service Charges

Recording monthly bank fees and service charges

Account	Debit	Credit
Bank Service Charge Expense	25
Cash		25