Transaction 1: Company A sold its products at $120 and received the full amount in cash.

 
Steps Self-Questions Answers

1 What did Company A receive? Cash.

2 If Company A received cash, how would this affect Receiving cash increases
the cash balance? the cash balance of the
company.

3 Which side of cash account represents the increase Debit side (Left side).
in cash?

4 What is the account name to record the sales of Sales.

products.

5 Which side of sales account represents the increase Credit side (Right side).
in sales?

6 Does the sum of debit side amounts equal to the Yes.

sum of credit side amounts? In other words, does $120 = $120
this journal entry balance?

[Journal entry to record transaction 1]

Debit Credit

Cash 120  
Sales   120

Examples of Journal Entries

   Transaction 2: Company A purchased supplies and paid $50 in cash.

 
 

Self-Questions Answers
Steps

1 What did Company A receive? Supplies.

2 If Company A received supplies, how would this affect the supplies It increases supplies balance.
balance?

3 Which side of supplies account represents the increase in cash? Debit side (Left side).

4 What did Company A pay? Cash.

 5 Which side of cash account represents the decrease in cash? Credit side (Right side).

6 Does the sum of debit side amounts equal to the sum of credit side Yes.
amounts? In other words, does this journal entry balance?
$50 = $50
[Journal entry to record transaction 2] 

Debit Credit

Supplies 50  
Cash   50

Debits and Credits of Accounts

 
Debit Credit

Increase in asset accounts Decrease in asset accounts

Increase in expense accounts Decrease in expense accounts

   

Decrease in liability accounts Increase in liability accounts

Decrease in equity accounts Increase in equity accounts

Decrease in revenue accounts Increase in revenue accounts

  
 
 
 
Normal Balances of Accounts

   Accounts have normal balances on the side where the increases in such accounts are recorded.
 
   Asset accounts have normal balances on debit side.
   Expense accounts have normal balances on debit side.
 
   Liability accounts have normal balances on credit side.
   Equity accounts have normal balances on credit side.
   Revenue accounts have normal balances on credit side.
 
   In the financial statements, accounts are reported on the sides where they have normal balances.
 
 
 Balance Sheet

Assets Liabilities

  Owners' Equity

   
 

Income Statement

Expenses Revenues

Basics of Journal Entries

 
Example 1:  Financing Activities
 
  

   Owner invested $10,000 in the company.

   Analysis of Transaction
  Debit or Credit ?
Steps
1 Increase in Assets (Cash) by $10,000 Debit
2 Increase in Owner's Equity by $10,000 Credit

   Journal Entry
  Debit Credit
Cash 10,000
Owner's Equity 10,000

   Description of Journal Entry

Owner invested $10,000 in the company.

   Results of Journal Entry

Cash balance increases by $10,000.  --> Increase in Assets
Owner's Equity balance increases by $10,000.  -->  Increase in Owner's Equity
  

Example 2:  Financing Activities

 
  
   The company borrowed $20,000 from a bank.

   Analysis of Transaction
  Debit or Credit ?
Steps
1 Increase in Assets (Cash) by $20,000 Debit
2 Increase in Liabilities (Borrowings) by $20,000 Credit

   Journal Entry
Debit Credit
Cash 20,000
 Borrowings 20,000

   Description of Journal Entry

Borrowed $20,000.

   Results of Journal Entry

Cash balance increases by $20,000.  --> Increase in Assets
Borrowings balance increases by $10,000.  -->  Increase in Liabilities
  

Example 3:  Investing Activities

 
  

   The company purchased $12,000 equipment and paid in cash.

   Analysis of Transaction
  Debit or Credit ?
Steps
1 Increase in Assets (Equipment) by $12,000 Debit
2 Decrease in Assets (Cash) by $12,000 Credit

   Journal Entry
  Debit Credit
Equipment 12,000
 Cash 12,000

   Description of Journal Entry

Purchased $12,000 equipment in cash.

   Results of Journal Entry

Equipment balance increases by $12,000.  --> Increase in Assets
Cash balance decreases by $12,000.  -->  Decrease in Assets
  
Example 4:  Operating Activities
 
  

   The company purchased $6,000 merchandise (600 units) on credit.

   Analysis of Transaction
  Debit or Credit ?
Steps
1 Increase in Assets (Merchandise) by $6,000 Debit
2 Increase in Liabilities (Accounts Payable) by $6,000 Credit

   Journal Entry
  Debit Credit
Merchandise 6,000
 Accounts Payable 6,000

   Description of Journal Entry

Purchased $6,000 merchandise on credit.

   Results of Journal Entry

Merchandise balance increases by $6,000.  --> Increase in Assets
Accounts Payable balance increases by $6,000.  -->  Increase in Liabilities
  

Example 5:  Operating Activities

 
  

   The company sold 500 units of merchandise at the price of $11,000.  Customer paid $9,000 in cash at
the time of sale.

   Analysis of Transaction
   Note:  This transaction includes both "REVENUE" and "EXPENSE" components.

   (1) REVENUE side

  Debit or Credit ?
Steps
1 Increase in Assets (Cash) by $9,000 Debit
2 Increase in Assets (Accounts Receivable) by $2,000 Debit
3 Increase in Revenue (Sales) by $11,000 Credit

   (2) EXPENSE side

  Debit or Credit ?
Steps
1 Increase in Expenses (Cost of Merchandise Sold) by $5,000 Debit
($6,000 / 600 units = $10 per unit)
($10 per unit X 500 units sold = $5,000 cost)
2 Decrease in Assets (Merchandise) by $5,000 Debit

   (1) REVENUE Journal Entry

   Debit Credit
Cash 9,000
Accounts Receivable 9,000
Sales Revenue 11,000
   Description of Journal Entry
Sold merchandise at $11,000 price and received $9,000 in cash.

   Results of Journal Entry

Cash balance increases by $9,000.  --> Increase in Assets
Accounts Receivable balance increases by $2,000.  --> Increase in Assets
Sales Revenue account balance increases by $11,000.  -->  Increase in Revenue
  
   (2) EXPENSE Journal Entry
  Debit Credit
Cost of Merchandise Sold 5,000
Merchandise 5,000

   Description of Journal Entry

To record the cost of merchandise sold.

   Results of Journal Entry

Merchandise balance decreases by $5,000. --> Decrease in Assets
Cost of Merchandise Sold account balance increases by $5,000. --> Increase in Expense
 

Example 6:  Operating Activities

 
  

   The company paid $3,500 salaries.

   Analysis of Transaction
  Debit or Credit ?
Steps
1 Increase in Expenses (Salaries Expense) by $3,500 Debit
2 Decrease in Assets (Cash) by $3,500 Credit

   Journal Entry
  Debit Credit
Salaries Expense 3,500
 Cash 3,500

   Description of Journal Entry

Paid $3,500 salaries.

   Results of Journal Entry

Cash balance decreases by $3,500.  --> Decrease in Assets
Salaries Expense account balance increases by $3,500.  -->  Increase in Expenses
  

Example 7:  Operating Activities

 
  

   The company paid $1,500 rent.

   Analysis of Transaction
  Debit or Credit ?
Steps
1 Increase in Expenses (Rent Expense) by $1,500 Debit
2 Decrease in Assets (Cash) by $1,500 Credit

   Journal Entry
  Debit Credit
Rent Expense 1,500
 Cash 1,500

   Description of Journal Entry

Paid $1,500 rent.

   Results of Journal Entry

Cash balance decreases by $1,500.  --> Decrease in Assets
Rent Expense account balance increases by $1,500.  -->  Increase in Expenses
  

Summary of Transactions from previous file.

 
No. Date   Transactions
(1) May 1   Owner invested $20,000 in the company.
(2) May 3   Borrowed $10,000 from a bank.
(3) May 6   Purchased $15,000 equipment in cash.
(4) May 8   Purchased $9,000 merchandise (900 units) on credit.
  Sold 500 units of merchandise at the price of $11,000.  
(5) May 15
    Customer paid $8,000 in cash at the time of sale.
(6) May 25   Paid $2,500 salaries.
(7) May 26   Paid $1,500 rent.
 

Summary of Journal Entries from previous file.

 
No. Journal Entries Debit Credit
     
(1) Cash 10,000  
(1)   Owner's Equity   10,000
Owner invested $10,000 in the company.     
   
(2) Cash 20,000  
(2)   Borrowings   20,000
Borrowed $20,000.    
      
(3) Equipment 12,000  
(3)   Cash   12,000
Purchased $12,000 equipment in cash.  
     
(4) Merchandise 6,000  
(4)   Accounts Payable   6,000
Purchased $6,000 merchandise on credit.  
     
(5)-1 Cash 9,000  
(5)-1 Accounts Receivable 2,000  
(5)-1   Sales   11,000
Sold merchandise at $11,000 price and received $9,000 in cash.  
     
(5)-2 Cost of Goods Sold 5,000  
(5)-2   Merchandise   5,000
To record the cost of goods sold ($5,000 merchandise).  
     
(6) Salaries Expense 2,500  
(6)   Cash   3,500
Paid $2,500 salaries.  
     
(7) Rent Expense 1,500  
(7)   Cash   1,500
Paid $1,500 rent.  

Calculating Accounting Balances

 
Cash
Credit
Debit
(1) 10,000 (3) 12,000
(2) 20,000 (6) 2,500
(5)-1 9,000 (7) 1,500
         
Balance 23,000    
       
 

Accounts Receivable
Credit
Debit
(5)-1 2,000     
         
Balance 2,000    
       
 
 Merchandise
Credit
Debit
(4) 6,000 (5)-2 5,000
       
Balance 1,000    
       
 

Equipment
Credit
Debit
(3) 12,000    
         
Balance 12,000    
       
 

Accounts Payable
Credit
Debit
     (4) 6,000
         
        Balance  6,000
       
 

Sales
Credit
Debit
       (5)-1 11,000
         
          Balance  11,000
          
 

Cost of Goods Sold

Credit
Debit
(5)-2 5,000    
           
Balance 5,000       
        
 

Salaries Expense
Credit
Debit
(6) 2,500     
          
Balance 2,500    
       
 

Rent Expense
Credit
Debit
(7) 1,500     
         
Balance 1,500    
       

Balance Sheet and Income Statement

Balance Sheet
As of May 31, 20XX
Liabilities and Owner's Equity
Assets
Cash $ 23,000   Accounts Payable  $  6,000
Accounts Receivable  2,000   Borrowings   20,000
Merchandise 1,000  
 (*1
Equipment  12,000   Owner's Equity 12,000
)
          
  Total Liabilities and
Total Assets $ 38,000      $ 38,000  
  Owner's Equity
 

Income Statement
For the Period from May 1 to May 31, 20XX
Revenue
      Sales $ 11,000
Total Revenue $ 11,000
   
Expenses  
      Cost of Goods Sold $ 5,000
      Salaries Expense 2,500
      Rent Expense 1,500
Total Expenses 9,000
   
 
Net Income $ 2,000 (*2)
 
 (*1) Owner's Equity=Investment by Owner+Net Income=$10,000+$2,000=$12,000
(*2)  Net Income = Total Revenue - Total Expenses = $11,000 - $9,000 = $2,000
The following accounts have normal balances on the debit side

1. Asset accounts
2. Expense and loss accounts
 
 
Increases and decreases 
 
1. Increases in asset accounts are recorded on the debit side
2. Decreases in asset accounts are recorded on the credit side
 
3. Increases in expense and loss accounts are recorded on the debit side
4. Decreases in expense and loss accounts are recorded on the credit side 

 
Examples of asset accounts
 
Cash and cash equivalents
 
  Accounts receivable
  Notes receivable
  Interest receivable
  Rent receivable
 
  Inventories
  Merchandise
  Raw materials
  Work-in-process
  Finished goods
  Supplies
 
  Prepaid expenses
  Prepaid rent expense
  Prepaid insurance expense
  Prepaid interest expense
   
  Investment in debt and equity securities
  Trading securities
  Available-for-sale securities
  Held-to-maturity securities
   
  Property, plant and equipment
  Land
  Buildings
  Equipment
   Machinery
  Capitalized leases
  Leasehold improvements
   
  Intangible assets
  Goodwill
  Trademarks
  Patents
  
 
Examples of expense and loss accounts
 
Cost of goods sold
 
 
  Selling, general and administrative expenses
  Salaries expense
  Advertising expense
  Rent expense
  Travel expense
  Communication expense
   
  Insurance expense
  Supplies expense
  Utilities expense
  Depreciation expense
   
  Other expenses and losses
  Interest expense
  Loss on disposal of equipment
  Income tax expense

Accounting Equation 01

Basic form of an equation

--> Left side = Right side

1. Balance Sheet Version

Assets = Liabilities + Equity

2. Income Statement Version

Net Income = Revenue - Expenses

3. Combined Version
Assets = Liabilities + Equity
---> Equity = Beginning Equity + Net Income

Assets = Liabilities + Beginning Equity + Net Income

---> Net Income = Revenue - Expenses

Assets = Liabilities + Beginning Equity + Revenue - Expenses

An Example of Combined Version

At January 1, 2010, the balance of equity was $100,000.

During the year of 2010, revenue and expenses were as follows
Revenue = $300,000
Expenses = $240,000

What is the balance of equity at December 31, 2010?

Equity = Beginning Equity + Revenue - Expenses

--> $100,000 + $300,000 - $240,000 = $160,000

At December 31, 2010, Entity A had the following balances

Assets = $280,000
Liabilities = $120,000
Equity = $160,000

Balance sheet version

Assets = Liabilities + Equity
--> $280,000 = $120,000 + $160,000

Combined version
Assets = Liabilities + Beginning Equity + Revenue - Expenses
--> $280,000 = $120,000 + $100,000 + $300,000 - $240,000

Cases and Practice Questions

Case 1:

Assets = $12,000
Liabilities = $5,000
Equity = $7,000
Assets = Liabilities + Equity
$12,000 = $5,000 + $7,000

Practice Question 1:

If Assets = $12,000 and Liabilities = $3,000

what is the amount of equity?

--> Equity = Assets - Liabilities = $12,000 - $3,000 = $9,000

Case 2:

Revenue = $16,000
Expenses = $10,000
Net income = Revenue - Expenses = $16,000 - $10,000 = $6,000

Practice Question 2:

If Revenue = $16,000 and Expenses = $11,000

what is the amount of net income?

--> Net income = Revenue - Expenses = $16,000 - $11,000 = $5,000

Case 3:

Assets = $25,000
Liabilities = $11,000
Beginning Equity = $10,000
Revenue = $36,000
Expenses = $32,000
Assets = Liabilities + Beginning Equity + Revenue - Expenses
$25,000 = $11,000 + $10,000 + $36,000 - $32,000

Practice Question 3:

In the following case, what is the amount of Beginning Equity

Assets = $55,000
Liabilities = $21,000
Revenue = $76,000
Expenses = $62,000
Beginning Equity = ?

Assets = Liabilities + Beginning Equity + Revenue - Expenses

$55,000 = $21,000 + ? + $76,000 - $62,000
--> Beginning Equity = ? = $20,000

Double Entry Recording 01

1. All accounting transactions are recorded

--> using "Double Entry" recording system

2. Double Entry Recording System

--> at least one "Debit" entry
--> at least one "Credit" entry

3. An example of double entry recording

Transaction --> purchased merchandise and paid $3,200 in cash
(1) One entry on debit --> merchandise 3,200
(2) One entry on credit --> cash 3,200
 debit credit
 
merchandise 3,200  
cash 3,200
4. The sum of all debit entries = The sum of all credit entries
If the sums of debit and credit entries are not equal for any journal entry
--> the journal entry is not correct

5. Debit and credit sides of the accounting equation

Left side of the accounting equation = debit = assets
Right side of the accounting equation = credit = liabilities and equity

Assets = Liabilities + Equity

6. Debit side entries

(1) Increase in assets
(2) Decrease in liabilities
(3) Decrease in equity

7. Credit side entries

(1) Decrease in assets
(2) Increase in liabilities
(3) Increase in equity

8. Combined version of accounting equation

Assets = Liabilities + Beginning equity + Revenue - Expenses

9. Debit side entries

(1) Increase in assets
(2) Decrease in liabilities
(3) Decrease in equity
(4) Decrease in revenue
(5) Increase in expenses

10. Credit side entries

(1) Decrease in assets
(2) Increase in liabilities
(3) Increase in equity
(4) Increase in revenue
(5) Decrease in expenses

11. Normal Balances

(1) Asset accounts have normal balances on debit side
(2) Liability accounts have normal balances on credit side
(3) Equity accounts have normal balances on credit side
(4) Revenue accounts have normal balances on credit side
(5) Expense accounts have normal balances on debit side
 
Practice Questions: Is it debit or credit?
 
   credit
decrease in expenses
increase in expenses debit
increase in revenue   credit
decrease in revenue debit  
     
increase in liabilities   credit
decrease in liabilities debit  
decrease in equity debit  
increase in equity   credit
     
normal balances of equity accounts   credit
normal balances of asset accounts debit  
normal balances of liability accounts   credit
     
normal balances of expense accounts debit  
normal balances of revenue accounts   credit
     
decrease in cash account   credit
increase in inventory account debit  
increase in borrowings   credit
     
decrease in preferred stock debit  
increase in cost of goods sold debit  
decrease in accounts receivable   credit
increase in bonds payable   credit

The following accounts have normal balances on the credit side

1. Liability accounts
2. Equity accounts
3. Revenue and gain accounts
 
 
Increases and decreases 
 
1. Increases in liability accounts are recorded on the credit side
2. Decreases in liability accounts are recorded on the debit side
 
3. Increases in equity accounts are recorded on the credit side
4. Decreases in equity accounts are recorded on the debit side
 
5. Increases in revenue and gain accounts are recorded on the credit side
6. Decreases in revenue and gain are recorded on the debit side
 
 
Examples of liability accounts
 
 Accounts payable
 
  Notes payable
   
  Salaries payable
  Rent payable
  Insurance payable
  Interest payable
  Income taxes payable
  Dividends payable
   
  Unearned rent revenue
   
  Borrowings
  Short-term borrowings
  Long-term borrowings
   
  Bonds payable
  Capital lease obligations
 
 
Examples of equity accounts
 
Paid-in capital
 
  Common stock
  Preferred stock
  Additional paid-in capital
   
  Retained earnings
 
 

Examples of revenue and gain accounts

 
Sales revenue
 
  Services revenue
  Commissions revenue
   
  Interest revenue
  Rent revenue
   
  Dividend income
   
  Gain on sale of buildings
 
 Assets

1. Assets represent future economic benefits 

2. Assets have normal balances on the debit side

3. Increases in asset accounts are recorded on the debit side

4. Decreases in asset accounts are recorded on the credit side
 
 
Classification of assets 
 
1. Assets are classified as current and noncurrent assets
 
2. Current assets are expected to be converted to cash or consumed
--> within a year or normal operating cycle whichever is longer
--> Codification link to current assets  
 
3. Current assets include the following
(1) Cash and cash equivalents
(2) Receivables, current
(3) Investments, current
(4) Inventories
(5) Prepaid expenses
 
4. Noncurrent assets are expected to be converted to cash or consumed
--> after a year or normal operating cycle whichever is longer
 
5. Noncurrent assets include the following
(1) Receivables, noncurrent
(2) Investments, noncurrent
(3) Property, plant and equipment
(4) Intangible assets
(5) Other noncurrent assets
 
 
Net working capital 
 
1. Net working capital = Current assets - Current liabilities
2. Net working capital measures the margin of current assets over current liabilities
3. More net working capital implies that the entity has more liquidity
 
 
Current ratio 
 
1. Current ratio = Current assets / Current liabilities
2. Current ratio measures whether the entity has enough current assets to pay off current
liabilities.
   
        Current Assets
  Current Ratio = ----------------------
       Current Liabilities
  
 
Practice Questions 
 
1. Current assets = $300,000, Current liabilities = $200,000

2. What is the amount net working capital?

    Net working capital = current assets - current liabilities
    = $300,000 - $200,000 = $100,000   

3. What is the current ratio?

    Current ratio = Current assets / Current liabilities
    = $300,000 / $200,000 = 1.50
 

 
Examples of current assets
 
Cash and cash equivalents
 
  Accounts receivable
  Notes receivable
  Interest receivable
  Rent receivable
 
  Inventories
  Merchandise
  Raw materials
  Work-in-process
  Finished goods
  Supplies
 
  Prepaid expenses
  Prepaid rent expense
  Prepaid insurance expense
  Prepaid interest expense
   
  Trading securities
  Available-for-sale securities, current
  Held-to-maturity securities, current
  Other current investments
  
 

Examples of noncurrent assets

 
 Notes receivable, noncurrent
 
  Long-term loans
  Available-for-sale securities, noncurrent
  Held-to-maturity securities, noncurrent
  Other noncurrent investments  
   
  Property, plant and equipment
  Land
  Buildings
  Equipment
  Machinery
  Capitalized leases
  Leasehold improvements
   
  Intangible assets
  Goodwill
  Trademarks
  Patents

Liabilities
 
1. Liabilities are present obligations to transfer resources in the future
 
2. Such obligations are due to past transactions or events
 
3. Past, present and future
(1) due to past transactions or events
(2) present obligations
(3) future transfer of resources
 
 
Debits and credits
 
1. Liability accounts have normal balances on the credit side

2. Increases in liability accounts are recorded on the credit side

3. Decreases in liability accounts are recorded on the debit side
 
 
Classification of liabilities
 
1. Liabilities are classified as current and noncurrent liabilities

2. Current liabilities are expected to require the transfer of resources

--> within a year or normal operating cycle whichever is longer
--> Codification link to current liabilities 
 
3. Current liabilities include the following
(1) Accounts payable
 (2) Notes payable, due within a year
(3) Short-term borrowings
(4) Income taxes payable
 
4. Noncurrent liabilities are expected to require the transfer of resources
--> after a year or normal operating cycle whichever is longer
 
5. Noncurrent liabilities include the following
(1) Notes payable, due after a year
(2) Long-term borrowings
(3) Bonds payable
(4) Capital lease obligations
  

 
Practice Questions
 
Entity A has the following account balances as of December 31, 2010.
 
Accounts Balances
 
1 Accounts payable due within a year $50,000
2 Notes payable due in 2011 $70,000
3 Notes payable due in 2012 $40,000
4 Accounts receivable due within a year $10,000
5 Notes receivable due in 2012 $10,000
6 Bonds payable due in 2015 $80,000
7 Income taxes payable $30,000
8 Short-term borrowings $20,000
 
1. What is the amount of current liabilities?
 

Accounts Balances
 
1 Accounts payable due within a year $50,000
2 Notes payable due in 2011 $70,000
7 Income taxes payable $30,000
8 Short-term borrowings $20,000
  Total current liabilities $170,000
 
2. What is the amount of noncurrent liabilities?
 

Accounts Balances
 
3 Notes payable due in 2012 $40,000
6 Bonds payable due in 2015 $80,000
   Total noncurrent liabilities $120,000
 
(Note) The following items are not liabilities
 

Accounts Balances
 
4 Accounts receivable due within a year $10,000
5 Notes receivable due in 2012 $10,000
 

Examples of current liabilities

 
Accounts payable, due within a year
 
  Notes payable, due within a year
   
  Salaries payable
  Rent payable
  Insurance payable
  Interest payable
  Income taxes payable
  Dividends payable
   
  Unearned rent revenue
   
  Short-term borrowings
  
 

Examples of noncurrent liabilities

 
Notes payable, due after a year
 
   
  Long-term borrowings
   
  Bonds payable
  Capital lease obligations

Revenue

1. Revenue is the increase in resources from the operations of an entity

2. Increase in resources may be (A), (B) or (C)

(A) Increase in assets
(B) Decrease in liabilities
(C) Both (A) and (B)
 Recognition of revenue

1. Recognition means "recording" in accounting

2. Revenue is reported when it is recognized
3. Revenue is recognized when it is earned and realized (or realizable)
4. Realized means the collection of cash
5. Earned means the delivery of products or services

Debits and credits

1. Revenue accounts have normal balances on the credit side

2. Increases in revenue accounts are recorded on the credit side

3. Decrease in revenue accounts are recorded on the debit side
  

 
Examples of revenue accounts

Sales revenue
 
  Services revenue
  Interest revenue
  Rent revenue
 

Practice Questions 

1. On December 15, 2010

Entity A sold 300 units of products at the price of $20 per unit

2. On December 15, 2010

Entity A received $3,600 in cash

3. On January 27, 2011

Entity A received $2,400 in cash

4. What is the amount revenue for 2010?

300 units x $20 = $6,000

5. What is the balance of accounts receivable at December 31, 2010?

$6,000 - $3,600 = $2,400

6. Prepare journal entries at the following dates

(1) December 15, 2010
(2) December 31, 2010
(3) January 27, 2011
7. Journal entry at December 15, 2010

debit credit
 
Cash 3,600  
Accounts receivable 2,400  
Sales revenue   6,000

8. Journal entry at December 31, 2010

--> No journal entry is required at December 31, 2010

9. Journal entry at January 27, 2011

debit credit
 
Cash 2,400  
Accounts receivable   2,400