Question

The following transactions occur for the Panther Detective Agency during the month of July:
a. Purchase a truck and sign a note payable, $14,300.
b. Purchase office supplies for cash, $530.
c. Pay $730 in rent for the current month.
Required:
1. Record the transactions. The company uses the following accounts: Cash, Supplies, Equipment (for the truck), Notes Payable, and Rent Expense. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)

Answer 1

Answer:

1.

   Purchase a truck and sign a note payable

                                        Debit            Credit

a. Equipment                   $14,300        

         Notes Payable                               $14,300

Purchase office supplies for cash

b.

                                    Debit              Credit

Supplies                       $530

                  Cash                                 $530

Pay in rent for the current month

c.                                    Debit              Credit

Rent Expense                 $730

                  Cash                                 $730

Explanation:

1. The transactions to record would be the following:

   Purchase a truck and sign a note payable

                                        Debit            Credit

a. Equipment                   $14,300        

         Notes Payable                               $14,300

Purchase office supplies for cash

b.

                                    Debit              Credit

Supplies                       $530

                  Cash                                 $530

Pay in rent for the current month

c.                                    Debit              Credit

Rent Expense                 $730

                  Cash                                 $730

Answer 2

Answer:

Panther Detective Agency

General Journal:

a: Debit Equipment $14,300

Credit Notes Payable $14,300

To record purchase of a truck with a note payable.

b: Debit Supplies $530

Credit Cash $530

To record purchase of office supplies for cash.

c: Debit Rent Expense $730

Credit Cash $730

To record payment of rent for the current month.

Explanation:

The general journal is an accounting tool used to record transactions on a daily basis.  It shows which account is to be debited and which is to be credited.

The account that receives value is debited and the account that gives value is credited.  It is from the general journal that transactions are posted to the general ledger.