Question

Prepare a journal entry for the purchase of office supplies on September 30 for $2,500, paying $800 cash and the remainder on account. If an amount box does not require an entry, leave it blank.

Answer 1

Answer:

Following would be the journal entry for purchase of office supplies;

Office Supplies   A/C                                   Dr. $2500

     To Cash A/C                                                               $800

     To Accounts Payables A/C                                       $1700

(Being office supplies purchased partly for cash, partly on credit, being recorded)

Purchases is a nominal account so the rule which applies is, debit all expenses and credit all incomes and gains.

Cash is also a real account so the principle which applies is, debit what comes in and credit what goes out.

Accounts Payable is also a real account so the same principle applies, as for cash.