15 Essential Journal Entries in Accounting
Here are 15 commonly used journal entries to help you understand various accounting transactions.
Started Business with Cash
- Example: ₹50,000 invested on 01-12-2023
| Date | Account Title | Debit (INR) | Credit (INR) | Description |
|---|---|---|---|---|
| 01-12-2023 | Cash | 50,000 | Initial cash investment | |
| 01-12-2023 | To Owner’s Capital | 50,000 | Owner’s capital contribution |
Purchased Office Supplies for Cash
- Example: ₹5,000 on 02-12-2023
| Date | Account Title | Debit (INR) | Credit (INR) | Description |
|---|---|---|---|---|
| 02-12-2023 | Office Supplies | 5,000 | Purchased office supplies | |
| 02-12-2023 | To Cash | 5,000 | Paid in cash |
Paid Rent
- Example: ₹10,000 on 03-12-2023
| Date | Account Title | Debit (INR) | Credit (INR) | Description |
|---|---|---|---|---|
| 03-12-2023 | Rent Expense | 10,000 | Rent for the month | |
| 03-12-2023 | To Cash | 10,000 | Paid in cash |
Received Cash for Services Rendered
- Example: ₹15,000 on 04-12-2023
| Date | Account Title | Debit (INR) | Credit (INR) | Description |
|---|---|---|---|---|
| 04-12-2023 | Cash | 15,000 | Payment received for services | |
| 04-12-2023 | To Service Revenue | 15,000 | Services rendered |
Purchased Furniture on Credit
- Example: ₹20,000 on 05-12-2023
| Date | Account Title | Debit (INR) | Credit (INR) | Description |
|---|---|---|---|---|
| 05-12-2023 | Furniture | 20,000 | Purchased furniture on credit | |
| 05-12-2023 | To Party(Accounts Payable) | 20,000 | Amount payable |
Paid Utility Bill
- Example: ₹2,000 on 06-12-2023
| Date | Account Title | Debit (INR) | Credit (INR) | Description |
|---|---|---|---|---|
| 06-12-2023 | Utilities Expense | 2,000 | Utility bill for the month | |
| 06-12-2023 | To Cash | 2,000 | Paid in cash |
Accrued Salaries
- Example: ₹25,000 on 07-12-2023
| Date | Account Title | Debit (INR) | Credit (INR) | Description |
|---|---|---|---|---|
| 07-12-2023 | Salaries Expense | 25,000 | Salaries for the period | |
| 07-12-2023 | To Salaries Payable | 25,000 | Salaries accrued |
Paid Interest on Loan
- Example: ₹3,000 on 10-12-2023
| Date | Account Title | Debit (INR) | Credit (INR) | Description |
|---|---|---|---|---|
| 10-12-2023 | Interest Expense | 3,000 | Interest on loan | |
| 10-12-2023 | To Cash | 3,000 | Paid in cash |
Depreciation of Equipment
- Example: ₹2,000 on 11-12-2023
| Date | Account Title | Debit (INR) | Credit (INR) | Description |
|---|---|---|---|---|
| 11-12-2023 | Depreciation Expense | 2,000 | Depreciation for the period | |
| 11-12-2023 | To Equipment(Accumulated Depreciation) | 2,000 | Reduced Asset, Depreciation recorded |
Paid Insurance Premium
- Example: ₹6,000 on 12-12-2023
| Date | Account Title | Debit (INR) | Credit (INR) | Description |
|---|---|---|---|---|
| 12-12-2023 | Insurance | 6,000 | Payment for insurance | |
| 12-12-2023 | To Cash | 6,000 | Paid in cash |
Recorded Unearned Revenue
- Example: ₹7,000 on 13-12-2023
| Date | Account Title | Debit (INR) | Credit (INR) | Description |
|---|---|---|---|---|
| 13-12-2023 | Cash | 7,000 | Advance payment received | |
| 13-12-2023 | To Unearned Revenue | 7,000 | Service to be provided |
Payment of Dividend
- Example: ₹4,000 on 14-12-2023
| Date | Account Title | Debit (INR) | Credit (INR) | Description |
|---|---|---|---|---|
| 14-12-2023 | Dividends Payable | 4,000 | Dividend declared | |
| 14-12-2023 | To Cash | 4,000 | Dividend paid |
Recorded Bad Debt Expense
- Example: ₹1,000 on 15-12-2023
| Date | Account Title | Debit (INR) | Credit (INR) | Description |
|---|---|---|---|---|
| 15-12-2023 | Bad Debt Expense | 1,000 | Uncollectible account | |
| 15-12-2023 | To Party(Accounts Receivable) | 1,000 | Written off bad debt |
Issued Shares for Cash
- Example: ₹100,000 on 08-12-2023
| Date | Account Title | Debit (INR) | Credit (INR) | Description |
|---|---|---|---|---|
| 08-12-2023 | Cash | 100,000 | Issued shares | |
| 08-12-2023 | To Share Capital | 100,000 | Share capital contribution |
Received Interest Income
- Example: ₹5,000 on 09-12-2023
| Date | Account Title | Debit (INR) | Credit (INR) | Description |
|---|---|---|---|---|
| 09-12-2023 | Cash | 5,000 | Interest received | |
| 09-12-2023 | To Interest Income | 5,000 | Interest earned |
Conclusion
These 15 journal entries cover various transactions a business might encounter, from starting the business to handling different expenses, income, and asset adjustments. Properly recording these transactions ensures accurate financial statements and effective financial management. For more detailed insights and examples on different accounting scenarios, keep following our blog!