First Example

The company started business on June 6, 2013. The business was started with $300,000. The transactions they
engaged in during their first month of business are below:

Date Transaction
June 8 An amount of $50,000 was paid for six months of rent.
Equipment costing $100,000 was purchased using $40,000 cash. The
remaining amount of $60,000 is a one year note with an interest rate of
June 9 3.4%
June 10 Office supplies were purchased totaling $25,000 on account.
June 16 Received $39,400 in cash for services rendered to customers.
June 16 Paid the account for office supplies purchased June 10.
$63,900 worth of services were given to customers. Received cash
amount of $43,700. Customers promised to pay remaining amount of
June 20 $20,200.
June 21 Paid employees’ wages for June 8-June 21. Wages totaled $23,500.
June 21 Received $20,200 in cash for services rendered to customers on June 20.
June 22 Received $6,300 in cash as advanced payment from customers.
June 27 Office supplies were purchased totaling $3,500 on account.
June 28 Electricity bill received totaling $1,850.
June 28 Phone bill received totaling $2,650.
June 28 Miscellaneous expenses totaled $4,320.

Second Example

This company was incorporated on March 1, 2013 with a starting of $1,500,000 and 10,000 common stock shares
at $50 par value. These are the company’s transactions for the first month:

Date Transaction
March 3 $300,000 were paid as advanced rent for six months.
March 4 Office supplies were purchased on account totaling $35,000.
March 6 Services were provided to customers, and the company received $54,000 in cash.
March 7 The accounts payable for office supplies purchased on March 4 was paid.
$200,000 in cash was used to purchase equipment costing $560,000. The remaining $360,000 became
March 7 a one year note payable with interest rate of 4%.
March 9 Office supplies were purchased on account totaling $13,500.
March 12 Services were provided to customers, and the company received $43,500 in cash.
March 13 The accounts payable for office supplies purchased on March 9 was paid.
March 14 Employees were paid wages for March 3-March 14 totaling $356,000.
Services were provided to customers totaling $256,720. Customers paid $143,650 with a promise to
March 14 pay $113,070 remaining balance in the future.
March 20 Office supplies were purchased on account totaling $5,400.
March 21 Customers paid $100,000 toward the $113,070 remaining balance for services rendered March 14.
March 23 The accounts payable for office supplies purchased on March 20 was paid.
March 25 Customers paid $13,070 for services rendered March 14.
March 27 Customers paid $23,000 in advance for services to be received.
March 28 Employees were paid wages for the final weeks of March, totaling $453,600.
March 28 Electricity bill was received totaling $6,750.
March 28 Phone bill was received totaling $8,754.
March 31 Miscellaneous expenses for the month were totaled at $15,450.

As in the example above, these transactions are then recorded into the accounting journal. Below is the table that
records the accounting journal for March 2013.
Third Example

For this last example, transactions will be recorded in three separate tables to represent four separate journals –
purchases journal, sales journal, cash receipts journal, and cash disbursements journal. This example should give
you a greater understanding of the debit-credit rules.

This company was incorporated January 1, 2014. They started out with a cash value of $2,350,000, and they have
25,000 stock at $200 par value. These are their transactions for the first month:

Date Transaction
January 2 Rent was paid in advance for a full year totaling $750,000.
Equipment costing $830,000 was purchased. $310,000 was paid in cash, and the remaining amount of
January 3 $520,000 was a one year note payable with an interest rate of 4.6%.
January 3 Office supplies were purchased on account totaling $340,000.
January 4 Services were provided to customers, and the company received $570,000 in cash.
January 5 Sales were made, and the company received $350,000 in cash.
January 6 The accounts payable for office supplies purchased on January 3 was paid.
Sales were made totaling $475,000. Customers paid $235,000 in cash and promised to pay the
January 7 remaining $240,000 in the future.
Services were provided to customers totaling $654,000. Customers paid $300,000 in cash and
January 8 promised to pay the remaining $354,000 in the future.
January 9 Office supplies were purchased on account totaling $115,000.
January 10 Customers paid $25,000 for sales made on January 7 leaving a balance of $215,000.
January 11 Employees were paid wages totaling $457,000 for the first two weeks of January 2014.
January 12 The accounts payable for office supplies purchased on January 9 was paid.
January 13 Customers paid $65,000 for services rendered on January 8 leaving a balance of $289,000.
The company paid $35,000 to the note payable for equipment purchased January 3 leaving a balance
January 14 of $485,000.
Janaury 15 Customers paid $53,000 for sales made on January 7 leaving a balance of $162,000.
January 16 Customers paid $43,000 for services rendered on January 8 leaving a balance of $246,000.
January 17 Office supplies were purchased on account for $75,000.
January 18 Customers paid $35,000 for services rendered on January 8 leaving a balance of $211,000.
January 19 The company paid $75,000 for equipment purchased January 3 leaving a balance of $410,000.
January 20 The accounts payable for office supplies purchased on January 17 was paid.
January 21 Customers paid $100,000 for sales made on January 7 leaving a balance of $62,000.
January 22 Sales were made, and the company received $235,000 in cash.
January 23 Customers paid $211,000 for services rendered on January 8.
January 24 Customers paid $65,000 in advance for services to be rendered.
January 25 Employees were paid wages totaling $545,000 for the third and fourth weeks of January 2014.
January 26 Customers paid $62,000 for sales made on January 7.
January 27 Sales were made, and the company received $345,000 in cash.
January 28 Office supplies were purchased on account totaling $215,000.
January 29 The accounts payable for office supplies purchased on January 28 was paid.
January 30 Services were provided to customers, and the company received $765,000 in cash.
January 31 Dividends were paid totaling $1,000,000.
January 31 Electricity bill totaling $15,450 was received.
January 31 Phone bill totaling $17,850 was received.
January 31 Miscellaneous expenses for the month totaled to $650,000.

You can see that such a long list of transactions would be quite confusing if kept in one single journal. Some
companies use QuickBooks to keep track of transactions and journals. If you are interested in using
QuickBooks, you might want to consider learning how to use it with an online course. Below is the table
representing the purchases journal.