Below is what our general journal and ledger accounts (T-Accounts) look like after all of the transactions for MM TAX have been recorded and posted.
Remember that the general journal is a place where each transaction is recorded in chronological order:
| Dec. 2 | Cash | 20,000 |
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Common stock
|
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| 20,000 |
|
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| Issued common stock for cash. |
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| Dec. 2 | Prepaid insurance | 1,200 |
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|
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Cash
|
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| 1,200 |
|
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| Prepaid 12 months' insurance. |
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|
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| Dec. 3 | Computer | 500 |
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|
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Cash
|
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| 500 |
|
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| Purchased a computer with cash. |
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| Dec. 4 | Office supplies | 50 |
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Accounts Payable
|
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| 50 |
|
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| Purchased office supplies on account. |
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|
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| Dec. 20 | Accounts receivable | 2,500 |
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|
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Fees earned
|
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| 2,500 |
|
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| Completed tax return and billed client. |
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|
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| Dec. 20 | Salaries expense | 200 |
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|
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Cash
|
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| 200 |
|
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| Paid employee salary. |
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|
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| Dec. 20 | Dividends | 200 |
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|
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Cash
|
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| 200 |
|
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| Paid a dividend. |
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|
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| Dec. 20 | Cash | 2,000 |
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|
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Unearned revenue
|
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| 2,000 |
|
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| Received cash for services to be performed later. |
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|
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Did you notice that we did not use the retained earnings account for any of the entries? You will see why in a later lesson.
|
debit transaction number
| D | C |
credit transaction number
|
|---|---|---|---|
| Dec. 2 | $20,000 |
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| $1,200 | Dec. 2 |
|
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| $500 | Dec. 3 |
|
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| $200 | Dec. 20 |
|
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|
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| $200 | Dec. 20 |
| Dec. 20 | $2,000 | ||
|
Balance | $19,900 |
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debit transaction number
| D | C |
credit transaction number
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|---|---|---|---|
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| $50 | Dec. 4 |
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debit transaction number
| D | C |
credit transaction number
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|---|---|---|---|
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| $2,000 | Dec. 20 |
|
debit transaction number
| D | C |
credit transaction number
|
|---|---|---|---|
| Dec. 20 | $2,500 |
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debit transaction number
| D | C |
credit transaction number
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|---|---|---|---|
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| $20,000 | Dec. 2 |
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debit transaction number
| D | C |
credit transaction number
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|---|---|---|---|
| Dec. 4 | $50 |
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debit transaction number
| D | C |
credit transaction number
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|---|---|---|---|
| Dec. 20 | $200 |
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debit transaction number
| D | C |
credit transaction number
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|---|---|---|---|
| Dec. 2 | $1,200 |
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debit transaction number
| D | C |
credit transaction number
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|---|---|---|---|
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| $2,500 | Dec. 20 |
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debit transaction number
| D | C |
credit transaction number
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|---|---|---|---|
| Dec. 3 | $500 |
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debit transaction number
| D | C |
credit transaction number
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|---|---|---|---|
| Dec. 20 | $200 |
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