Journal Entries

1. December 1, owner invested $120,000 in the business.

Cash

120,000

   Owner’s equity

120,000

2. December 1, paid $5,500 rent for December 20x1.

Rent expense

5,500

   Cash

5,500

3. December 2, purchased equipment and issued a $36,000 note payable in May 20x2.

Equipment

36,000

   Notes payable

36,000

4. December 8, purchased merchandise at $71,000 on account.

Merchandise

71,000

   Accounts payable

71,000

5. December 15, sold merchandise at $60,000 on account.

Accounts receivable

60,000

   Sales revenue

60,000

6. December 15, the cost of merchandise sold was $42,000.

Cost of goods sold

42,000

   Merchandise

42,000

7. December 19, paid $50,000 accounts payable to the supplier.

Accounts payable

50,000

   Cash

50,000

8. December 30, collected $45,000 accounts receivable from the customer.

Cash

45,000

   Accounts receivable

45,000

9. December 31, paid $4,500 salaries for December 20x1.

Salaries expense

4,500

   Cash

4,500

10. December 31, depreciation expense for equipment was $600.

Depreciation expense

600

   Accumulated depreciation

600

11. December 31, owner withdrew $10,000 cash for personal use.

Owner’s equity

10,000

   Cash

10,000