How to Make Journal Entries Using the Double Entry System

How to Make Journal Entries Using the Double

Entry System

© 2014 UniversityNow. All Rights Reserved.

The Accounting Equation:

Assets = Liabilities + Owner’s Equity

When making general ledger entries, it is essential to remember that both debit and credits have to match for accurate record keeping. Businesses will have a list of monthly transactions completed, and these transactions must be recorded using the appropriate account types in order to create accurate financial statements. The following is a demonstration of how general ledger entries are recorded.


List of Business Transactions

On April 1, 2014, John Collins established a catering company, Collins Catering. During the month, John completed the following transactions related to the business:

April 1. John transferred cash from a personal bank account to an account used for the business, $19,500.

2. Paid rent for period of April 5 to the end of the month, $2,550.

4. Purchased a used catering truck for $17,575, paying $9,865 cash and giving a note payable for the remainder.

5. Purchased supplies for cash, $2,200.

10. Received cash for job complete, $15,650.

15. Paid annual premiums on property and casualty insurance, $2,985.

16. Recorded jobs completed on account and sent invoices to customers, $7,950.

25. Received cash from customers on account, $4,250.

30. Paid wages of employees, $3,700.

30. Withdrew cash for personal use, $2,550.


April 1. John transferred cash from a personal bank account to an account used for the business, $19,500.

There are two accounts that would be affected by this business transaction: Cash and Capital. The entry would be recorded in the general ledger as:

Journal Date Description Debit Credit

April 1. Cash…………………………..19,500

John Collins, Capital……... 19,500

Journaling Using the Double-Entry Method of Accounting


April 2. John paid rent for period of April 5 to the end of the month, $2,550.

There are two accounts that would be affected by this business transaction: Rent Expense and Cash. The entry would be recorded in the general ledger as:


April 2. Rent Expense…………………..2,550

Cash………………………2,550



April 4. John purchased a used catering truck for $17,575, paying $9,865 cash and giving a note payable for the remainder.

There are three accounts that would be affected by this business transaction: Truck, Cash, and Notes Payable. The entry would be recorded in the general ledger as:

Journal Date Description Debit

CreditApril 4. Truck………………………….. 17,575Cash……………….……... 9,865Notes Payable……………. 7,710



April 5. John purchased supplies for cash, $2,200.

There are two accounts that would be affected by this business transaction: Supplies and Cash. The entry would be recorded in the general ledger as:


April 5. Supplies……………………….. 2,200Cash……………….……... 2,200



April 10. John received cash for job complete, $15,650.

There are two accounts that would be affected by this business transaction: Cash and Fees Earned. The entry would be recorded in the general ledger as:


April 10. Cash..…………………………..15,650

Fees Earned….…….……... 15,650



April 15. John paid annual premiums on property and casualty insurance, $2,985.

There are two accounts that would be affected by this business transaction: Prepaid Insurance and Cash. The entry would be recorded in the general ledger as:


April 15. Prepaid Insurance.……………..2,985

Cash……………….……... 2,985



April 16. John recorded jobs completed on account and sent invoices to customers, $7,950.

There are two accounts that would be affected by this business transaction: Accounts Receivable and Fees Earned. The entry would be recorded in the general ledger as:


April 16. Accounts Receivable…………..7,950

Fees Earned……….……... 7,950



April 25. John received cash from customers on account, $4,250.

There are two accounts that would be affected by this business transaction: Cash and Accounts Receivable. The entry would be recorded in the general ledger as:


April 25. Cash…………………………..4,250

Accounts Receivable...…... 4,250



April 30. John paid wages of employees, $3,700.

There are two accounts that would be affected by this business transaction: Wages Expense and Cash. The entry would be recorded in the general ledger as:


April 30. Wages Expense………………..3,700

Cash……………….……... 3,700



April 30. John withdrew cash for personal use, $2,550.

There are two accounts that would be affected by this business transaction: John Collins, Drawing and Cash. The entry would be recorded in the general ledger as:


April 30. John Collins, Drawing…………..2,550

Cash……………….……... 2,550


Economy & Finance

How to Make Journal Entries Using the Double Entry System