I am not sure where to post the following entries when it comes to Journal Entri
ID: 2422172 • Letter: I
Question
I am not sure where to post the following entries when it comes to Journal Entries. I am not sure which ones go into the the General Journal and which go into the Cash Payments, Cash Reciepts, Purchases, and Sales Journals?
1. Discovered error made by Jack Hobie. One-third ($270.00) of the supplies purchased from Beach Office Supply on June 2 were actually store supplies rather than office supplies.
2. Sold merchandise over the counter to Bill Hankins for $80 cash.
3. Sold $2,000 of merchandise to Sail Board City on account; terms 3/10, n/30; invoice #17.
4. Received a check from Bill Hankins in the amount of $205 to be applied to invoice #8.
5. Received a check from Laker Marine Supply in full payment of the balance of their account. You must determine if a discount was taken, and if so, how much it was. Seaside Marina only grants discounts on the basis of full payment of an invoice within the discount period.
6. Paid Avis Boat Builders the balance due on Seaside's June 3 merchandise purchase.
7. Sent a check to Catamaran Corp. in full payment of Seaside's June 19 merchandise purchase.
8. Purchased $1000 of merchandise for resale from Tackle Box Supply on account; terms 2/10, n/30.
9. Purchased $1,400 of merchandise for resale from Nautical Industries on account; terms 2/10, n/30.
10. Seaside needed additional space and purchased a warehouse to remodel and the land around it. Prior to arranging permanent financing, Seaside signed a short term construction note payable. The terms of the note are $50,000, 90 days at 16%. The building value was determined to be $40,000.
11. Seaside's ad agency offered Mr. Hobie a special deal. If he purchased an additional $150 of advertising to be used in August, Seaside would receive free layout services. Mr. Hobie paid the agency $150 to be recorded as advertising expense.
Explanation / Answer
Only 3 types of transactions are recorded in the general journal: rectification entries, adjusting entries and residual entries, i.e a transaction which cannot be recorded in any of the subsidiary books.
1. Rectification entry, hence general journal
2. Cash transaction, cash receipts side of the cash book.
3. Credit sale, hence to be recoded in the sales journal
4. Cash transaction, therefore to be recorded on the receipts side of the cash book.
5. Cash transaction since a check is received. Hence it is a cash receipt to be recorded in the cash book.
6. Cash payment is involved. Therefore it is to be recorded in the credit side of the cash book.
7. Cash payment again.
8. Purchase on account, hence to be recorded in the purchases journal
9. Again a credit purchase, hence the transaction to be recorded in the purchase journal
10. This is a residual entry as it cannot be recorded in any of the subsidiary books. Hence it needs to be recoded in the general journal.
11, Cash payment. Hence to be recorded on the credit side of the cash book.
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