Journalizing Transactions

1. Journalizing
by:
Lani Marie J. Daapong. LPT

2. The following are the transaction for
Juan Dela Cruz ,
for the month of September

3. Sept. 01 Juan Dela Cruz has a talent for painting. He is into charcoal,
water color, acrylic, and oil painting. Having the flair for it, He
started studying painting under a private tutor at the age of 10,
because of many request for the job paintings. Juan Dela Cruz is
getting from prospective customers; He decided to put up an Art
Gallery. He invested P 500,000 in this initial investment.
Analysis Assets increased. Owner’s Equity increased.
Rules Debit increases in Assets. Credit increases in Owner’s Equity.
Entry Increase in Assets is recorded by a debit to Cash.
Increase in Owner’s Equity is recorded by a credit to Juan Dela
Cruz Capital
DR CR
Cash 500,000
Dela Cruz Capital 500,000
Initial Investment

4. Sept. 01 Acquired transportation equipment to be used for delivery P
300,000 cash.
Analysis An Asset increased. Another Asset decreased.
Rules Debit increases in Assets. Credit decreases in Assets.
Entry Increase in Assets is recorded by a debit to Transportation
Equipment.
Decrease in Assets is recorded by a credit to Cash.
DR CR
Transportation Equipment 300,000
Cash 300,000
Purchased transportation equipment for cash

5. Sept. 01 Rented office space and paid two months’ rent in advance,
P30, 000.
Analysis An Asset increased. Another Asset decreased.
Rules Debit increases in Assets. Credit decreases in Assets.
Entry Increase in Assets is recorded by a debit to Prepaid Rent.
Decrease in Assets is recorded by a credit to Cash.
DR CR
Prepaid Rent 30,000
Cash 30,000
Paid two months’ rent in advance

6. Sept. 02 Juan Dela Cruz issued a promissory note for P 200,000 loan from
bank. The note carries a 12% interest per annum and payable for
one year.
Analysis Assets increased. Liabilities increased.
Rules Debit increases in Assets. Credit increases in Liability.
Entry Increase in Assets is recorded by a debit to Cash.
Increase in Liabilities is recorded by a credit to Notes Payable.
DR CR
Cash 200,000
Notes Payable 200,000
Borrowed money from the bank issuing a promissory note

7. Sept. 02 Hired an office secretary with P 5,000 monthly salary.
The secretary started work on the same day.
There is no entry at this point as the hiring of the
secretary has no effect on the assets, liabilities and
owner’s equity.

8. Sept. 02 Called Enriquez Art Supplies and ordered oil paints and
brush worth P 12,000.
There is no entry in the journal at this point as the
ordering of the oil paints and brushes has no effect on
the assets, liabilities, and owner’s equity. No delivery of
the supplies has been made thereby no liability arises.

9. Sept. 04 Paid Insular Life Insurance Co. P 18,000 for one year insurance of
the art gallery.
Analysis An Asset increased. Another Asset decreased.
Rules Debit increases in Assets. Credit decreases in Assets.
Entry Increase in Assets is recorded by a debit to Prepaid Insurance.
Decrease in Assets is recorded by a credit to Cash
DR CR
Prepaid Insurance 18,000
Cash 18,000
Paid one year insurance premium

10. Sept. 05 Acquired office equipment from Abenson’s P 50,000 paying P20,
000 and the balance at the end of the month.
Analysis Assets increased. Assets decreased. Liabilities increased
Rules Debit increases in Assets. Credit decreases in Assets. Credit
increases in Liabilities.
Entry Increase in Assets is recorded by a debit to Office Equipment.
Decrease in Assets is recorded by a credit to Cash.
Increase in Liabilities is recorded by a credit to Accounts Payable.
DR CR
Office Equipment 50,000
Cash 20,000
Accounts Payable 30,000
Bought office equipment paying cash and the balance on account.

11. Sept. 08 The P12, 000 oil paints ordered from Enriquez Art Supplies were
delivered on account.
Analysis Assets increased. Liabilities increased.
Rules Debit increases in Assets. Credit increases in Liabilities.
Entry Increase in Assets is recorded by a debit to Art Supplies.
Increase in Liabilities is recorded by a credit to Accounts Payable.
DR CR
Art Supplies 12,000
Accounts Payable 12,000
Purchase Art Supplies on account

12. Sept. 10 Paid Enriquez Art Supplies P 5,000 of the amount owed.
Analysis Assets decreased. Liabilities decreased.
Rules Debit decreases in Liabilities. Credit decreases in Assets.
Entry Decrease in Liabilities is recorded by a debit to Accounts Payable.
Decrease in Assets is recorded by a credit to Cash.
DR CR
Accounts Payable 5,000
Cash 5,000
Made partial payment of liabilities.

13. Sept. 11 Paid the portrait of Don Enrique Zobel receiving P 200,000 cash
for the completed portrait.
Analysis Assets increased. Owner’s equity increased.
Rules Debit increases in Assets. Credit increases in Owner’s Equity.
Entry Increase in Assets is recorded by a debit to Cash
Increase in Owner’s Equity is recorded by a credit to Painting
Revenue.
DR CR
Cash 200,000
Painting Revenue 200,000
Received cash for painting revenue

14. Sept. 15 Paid secretary’s salary for half month P 2,500
Analysis Assets decreased. Owner’s Equity decreased.
Rules Debit decreases in Owner’s Equity. Credit decreases in Assets.
Entry Decrease in Owner’s Equity is recorded by a debit to Salaries
Expense
Decrease in Assets is recorded by a credit to Cash.
DR CR
Salaries Expense 2,500
Cash 2,500
Paid secretary’s half month salary

15. Sept. 17 Received P250,000 cash for the contract to paint the
portrait of Doña Susana.
Analysis Assets increased. Liabilities increased.
Rules Debit increases in Assets. Credit increases in
Liabilities.
Entry Increase in Assets is recorded by a debit to Cash.
Increases in Liabilities are recorded by a credit to
Unearned Revenue.
DR CR
Cash 250,000
Unearned Painting
Revenue
250,000
Received cash for painting services to be rendered.

16. Sept. 21 Delivered and billed Mr Sy P 150,000 for a landscape painting.
Analysis Assets increased. Owner’s equity increased.
Rules Debit increases in Assets. Credit increases in Owner’s Equity.
Entry Increase in Assets is recorded by a debit to Accounts Receivable.
Increases in Owner’s Equity is recorded by a credit to Painting
Revenue.
DR CR
Accounts Receivable 150,000
Painting Revenue 150,000
painting a portrait on account

17. Sept. 23 Juan Dela Cruz withdrew P 30,000 for personal use.
Analysis Assets decreased. Owner’s Equity decreased.
Rules Debit decreases in Owner’s Equity. Credit decreases in Assets.
Entry Decrease in Owner’s Equity is recorded by a debit to Dela Cruz
Drawing.
Decrease in Assets is recorded by credit to Cash .
DR CR
Dela Cruz, Drawing 30,000
Cash 30,000
Juan Dela Cruz withdraw cash for personal use.

18. Sept. 23 Received bill from PLDT P 900.
Analysis Liabilities increased. Owner’s Equity decreased.
Rules Debit decreases in Owner’s Equity. Credit decreases in
Liabilities.
Entry Decrease in Owner’s Equity is recorded by a debit to Utilities
Expense.
Increase in Liabilities is recorded by a credit to Utilities Payable.
DR CR
Utilities Expense 900
Utilities Payable 900
Received bill from PLDT

19. Sept. 25 Received P 100,000 from Mr Sy as partial payment for
landscape painting delivered last Sept. 21
Analysis As Assets increased. Another Asset decreased.
Rules Debit increases in Assets. Credit decreases in Assets.
Entry Increase in Assets is recorded by a debit to Cash.
Decrease in Assets is recorded by a credit to Accounts
Receivable.
DR CR
Cash 100,000
Accounts Receivable 100,000
Received cash as partial collection from Mr Sy.

20. Sept. 30 Paid electricity bill for the month P 4,000
Analysis Assets decreased. Owner’s Equity decreased.
Rules Debit decreases in Owner’s Equity. Credit decreases in Assets.
Entry Decrease in Owner’s Equity is recorded by a debit to Utilities
Expense.
Decrease in Assets is recorded by a credit to Cash.
DR CR
Utilities Expense 4,000
Cash 4,000
Paid electricity bill for the month.