How to Pass Journal Entries

In accounting system, each business transaction is first recorded in an accounting record called the journal. Since the transactions are initially recorded in a journal therefore it is also called book of original entry. The process in which one account is debited and other credited is called journalizing. The journal is a chronological (day-by-day) record of business transactions. Here, we should note that the transactions can be directly recorded in the ledger but there are various advantages associated with the use of journal. For example, journal helps to avoid the errors, provides lot of information at one place and gives the record of business transactions for all times. There are various types of journals and the simplest one is general journal.


Problem: Kramer Trading Company completed the following transactions during the month of January 2010. Prepare general journal entries to illustrate the effects of each of the following transactions.

Jan. 1.   Started business by investing cash $30000 and Furniture $13000.

Jan. 2.   Secured a loan of $70000 from the bank.

Jan. 4.   Purchased a truck for $14000 paying cash $10000

            and note payable for the balance.

Jan. 9.   Paid rent for December $1000.

Jan. 11. Purchased supplies for cash $700.

Jan. 13. Purchased goods on credit from George for $8000.

Jan. 15. Return goods of $3000 to George.

Jan. 16. Sold goods to Vikram for $5000 on credit.

Jan. 20. Vikram returned goods worth $1000.

Jan. 22. Paid $5000 to George for the goods purchased on credit.

Jan. 23. Received cash from Vikram $4000.

Jan. 25. Paid electricity expense for the month of December $1500

Jan. 29. Withdraw cash for personal use $6000.


 Kramer Trading Company

General Journal Entries



In order to see the ledger accounts for the above journal entries please click here.

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16 responses to How to Pass Journal Entries

I mst say to u guyz thax very help me I was struggling with general journal.thax very mch for your I understand mch better than before.

guyzz….i want 20 transactions n journal enteries ledger of them den trial balance & final a/c’s of it…plzzzz help me!!!

i want journal entry for rent Rs 10000, but only Rs 8000 is paid. Also what will be entry for that Rs 2000 unpaid as of now.

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