Journalizing

Jessah Mae G. Fernandez

 GENERAL JOURNAL Page 1
DATE DESCRIPTION P/R DEBIT CREDIT

2005
August 2 Truck 125 25, 000
Cash 101 5, 000

Bank Loan 200 20, 000

Purchase of truck with P5,000 cash

and P20,000 in loan

• In writing a journal, you must
observe accuracy in analysis and
recording. Errors must be
avoided to come up with
accurate and exact results.
What is a
Journal?
• A journal provides a chronological
record of transactions with the
explanations and clear references to
their supporting documents. Recording
transactions in the journal is called
journalizing.
• The first thing to do after a transaction is
to enter it in a preliminary record called
a journal. In this lesson, you will learn
the importance of this record and the
procedures in journalizing.
• JOURNAL is sometimes called the book of original
entry, because this is where transactions are first
recorded.

•  A journal shows the transactions for each day and

may contain explanatory information concerning
the transactions. The debits and credits of
transactions can then be transferred to the
appropriate account.  
 What is the
importance of a
journal?
 The reasons for using a journal are:
•  It provides a chronological record of all
transactions;
• It fulfils the need for recording in one place
all of the debits and credits of each
transaction; and 
• It provides more information, such as a
detailed explanation of a transaction, than
can conveniently be recorded on the
individual ledger accounts.
• There are various kinds of journals. The
number and the type used in a particular
business will depend upon the size of the
business and nature of operations. The
simplest and most flexible type is the
general journal. It has only two amount
columns.
 The column headings of a general journal
are as follows:

•  Date - used to indicate the month, year,

and date on which the transaction
occurred.
• Description - used for the account titles
being debited and credited and for brief
explanation indicating the nature of the
transaction.
 The column headings of a general journal
are as follows:
• P/R - this stands for Posting Reference, and
is used to indicate the ledger page to which
the particular debit or credit entry has been
posted.
• Debit - the money column for the debit
amount of an entry.
• Credit - the money column for the credit
amount of an entry.
 General Journal Page 1
1 2

Date Description P/R Debit Credit

1 1
2 2
3 3
4 4
5 5
6 6
7 7
8 8
9 9
10 10
An example of a Journal
PROCEDURES FOR RECORDING TRANSACTIONS IN A GENERAL JOURNAL
 

1. Record the date by writing the year in

small figures at the top of the first column,
the month on the first line of the first
column, and the day in the second column
of the first line. For subsequent entries on
the same page for the same month and
year, the month and year can be omitted.
PROCEDURES FOR RECORDING TRANSACTIONS IN A GENERAL JOURNAL
 

2. Write the exact names of the accounts

debited and credited under the heading
“Description.” Write the name of the
account debited next to the left margin of
the first line, and indent the name of the
account credited. The explanation is
placed on the next line and further
indented. It should be brief but sufficient
to explain and identify the transaction.
 • A transaction can have more than
one debit and/or credit entry; in
such a case it is called a compound
entry. In a compound entry, all
debit accounts involved are listed
before any credit accounts.
3. Write the debit amount in the appropriate
column opposite the accounts to be debited, and
write the credit amount opposite the accounts to
be credited.
PROCEDURES FOR RECORDING TRANSACTIONS IN A GENERAL JOURNAL
 

4. At the time of recording the transactions, nothing

is placed in the P/R (Posting Reference) column.
Later, if the company uses an account number to
identify accounts in the ledger, fill in the account
number to provide a convenient cross-reference
from the general journal to the ledger and
indicate the page number of the journal to the P/R
column of the ledger.
5. It is customary to skip a line after each journal
entry. Look at the sample below.
 General Journal Page 1
1 2

Date Description P/R Debit Credit

20xx
1 July 1 Cash 975000 1
2 Mr. C. Duterte, Capital 975000- 2
975000
3 The owner invested cash to start 975000- 3
4 his own car rental business. 4
5 5
6 5 Equipment 600000- 6
7 Cash 300000- 7
8 Accounts Payable 300000- 8
9 Purchased equipment on cash 9
10 and account. 10
11 11
An example of a Journal
Are you now
ready
to analyze
business
transactions?
The journal entries
of Mr. Carlo Duterte
are presented
on the next page.
 The following are the transactions of Mr. Carlo Duterte for the month of July, 20XX

 
July 1 Mr. C. Duterte invested P 975,000 to start his own car
rental business - CD Car Rental
5
Purchased equipment (three cars) for P 600,000, paying
P 300,000 down and agreed to pay the rest in 60 days.
7 Purchased supplies on credit, P 30,000.
10 Paid rent for the month, P 6,500.
13 Cash received from customers, P 10,000.
15 Withdrew cash for personal expenses, P 2,000.
18 Billed customer for rental, P 8,750.
20 Paid partial for the transaction on July 7, P 8,300.
 The following are the transactions of Mr. Carlo Duterte for the month of July, 20XX

July Mr. C. Duterte invested P 975,000 to

1 start his own car rental business - CD
Car Rental
 General Journal
Page 1
1 2

Date Description P/R Debit Credit

20xx
1 July 1 Cash 1
2 Mr. C. Duterte, Capital 975000- 2
3 The owner invested cash to start 975000- 3
4 his own car rental business. 4
5 5
6 5 Equipment 600000- 6
7 Cash 300000- 7
8 Accounts Payable 300000- 8
9 Purchased equipment on cash 9
10 10
11 7 Supplies 11
12 Accounts Payable 30000- 12
13 Purchased supplies on credit. 30000- 13
14 14
15 10 Rent Expense 6500- 15
16 Cash 6500- 16
17 Paid rent for the month. 17
18
19 13 Cash
975000
10000-
18
19
20 Service Rev enue 10000- 20
21 Cash received from customers. 21
22
23 15 Mr. C. Duterte, Drawing 2000-
975000
22
23
24 Cash 2000- 24
25 T he owner withdrew cash. 25
26 26
27 18 Accounts Receiv able 8750- 27
28 Service Rev enue 8750- 28
29 Billed customer for rental. 29
30 30
31 20 Accounts Payable 8300- 31
32 Cash 8300- 32
33 Partial payment of account. 33
34 34
35 35
 The following are the transactions of Mr. Carlo Duterte for the month of July, 20XX

July Purchased equipment (three cars) for

5 P 600,000, paying P 300,000 down
and agreed to pay the rest in 60 days.
 Gener al J our nal
Page 1
1 2

Date Des cription P/R Debit Credit

20xx
1 July 1 Cas h 1
2 Mr. C. Duterte, Capital 975000- 2
3 T he ow ner invested cash to start 975000- 3
4 his own car rental bus ines s. 4
5 5
6 5 Equipment 600000- 6
7 Cash 300000- 7
8 Accounts Payable 300000- 8
9 Purchased equipment on cas h 9
10 10
11 7 Supplies 11
12 Accounts Payable 30000- 12
13 Purchased s upplies on credit. 30000- 13
14 14
15 10 Rent Expense 6500- 15
16 Cash 6500- 16
17 Paid rent for the month. 17
18 18
19 13 Cas h 10000- 19
20 Serv ice Rev enue 10000- 20
21 Cash receiv ed from customers. 21
22 22
23 15 Mr. C. Duterte, Drawing 2000- 23
24 Cash 2000- 24
25 T he owner withdrew cash. 25
26 26
27 18 Accounts Receiv able 8750- 27
28 Serv ice Rev enue 8750- 28
29 Billed custom er for rental. 29
30 30
31 20 Accounts Pay able 8300- 31
32 Cash 8300- 32
33 Partial paym ent of account. 33
34 34
35 35
 The following are the transactions of Mr. Carlo Duterte for the month of July, 20XX

July Purchased supplies on credit, P 30,000.

7
 General J ournal
Page 1
1 2

Date Description P/R Debit Credit

20xx
1 July 1 Cash 1
2 Mr. C. Duterte, Capital 975000- 2
3 T he ow ner invested cash to start 975000- 3
4 his own car rental business . 4
5 5
6 5 Equipm ent 600000- 6
7 Cash 300000- 7
8
9
10
11 7
Accounts Pay able
Purchas ed equipm ent

Supplies
on cas h
30000 300000- 8
9
10
11
12 Accounts Pay able 30000- 12
13 Purchas ed supplies on credit. 30000- 13
14 14
15
16
17
18
10 Rent Ex pens e
Cash
Paid rent for the m onth.
6500-
6500-
30000
15
16
17
18
19 13 Cash 10000- 19
20 Service Revenue 10000- 20
21 Cash received from cus tom ers . 21
22 22
23 15 Mr. C. Duterte, Drawing 2000- 23
24 Cash 2000- 24
25 T he owner withdrew cash. 25
26 26
27 18 Accounts Receivable 8750- 27
28 Service Revenue 8750- 28
29 Billed custom er for rental. 29
30 30
31 20 Accounts Pay able 8300- 31
32 Cash 8300- 32
33 Partial pay ment of account. 33
34 34
35 35
 The following are the transactions of Mr. Carlo Duterte for the month of July, 20XX

July Paid rent for the month, P 6,500.

10
 Gener al J our nal
Page 1
1 2

Date De scription P/R Debit Credit

20xx
1 July 1 Ca sh 1
2 M r. C. Duterte, Capita l 975000- 2
3 T he owner inve sted cash to start 975000- 3
4 his own car rental bus ines s. 4
5 5
6
7
8
9
5

Prepaid Rent
Equipment
Cash
Accounts Pay able
Purchased equipment on ca sh
600000-
300000-
300000-
6
7
8
9
10 10
11 7 Supplies 11
12 Accounts Pay able 30000- 12
13 Purchased supplies on credit. 30000- 13
14 14
15 10 Re nt Ex pense 6500- 15
16 Cash 6500- 16
17 Paid rent for the month. 17
18 18
19 13 Ca sh 10000- 19
20 Serv ice Rev enue 10000- 20
21 Cash receiv ed from custom ers. 21
22 22
23 15 M r. C. Duterte, Drawing 2000- 23
24 Cash 2000- 24
25 T he owner withdrew cas h. 25
26 26
27 18 Accounts Receiv able 8750- 27
28 Serv ice Rev enue 8750- 28
29 Billed customer for rental. 29
30 30
31 20 Accounts Pay able 8300- 31
32 Cash 8300- 32
33 Partial pay ment of account. 33
34 34
35 35
 The following are the transactions of Mr. Carlo Duterte for the month of July, 20XX

July Cash received from customers,

13 P 10,000.
 Gener al J our nal
Page 1
1 2

Date Des cription P/R Debit Credit

20xx
1 July 1 Cash 1
2 Mr. C. Duterte, Capital 975000- 2
3 T he owne r invested cash to start 975000- 3
4 his own car rental business. 4
5 5
6 5 Equipment 600000- 6
7 Cash 300000- 7
8 Accounts Pay able 300000- 8
9 Purchased equipment on cas h 9
10 10
11 7 Supplies 11
12 Accounts Pay able 30000- 12
13 Purchased supplies on credit. 30000- 13
14 14
15 10 Rent Ex pense 6500- 15
16 Cash 6500- 16
17 Paid rent f or the month. 17
18 18
19 13 Cash 10000- 19
20 Serv ice Rev enue 10000- 20
21 Cash receiv ed f rom custom ers. 21
22 22
23 15 Mr. C. Duterte, Drawing 2000- 23
24 Cash 2000- 24
25 T he owner withdrew cash. 25
26 26
27 18 Accounts Receiv able 8750- 27
28 Serv ice Rev enue 8750- 28
29 Billed customer for rental. 29
30 30
31 20 Accounts Pay able 8300- 31
32 Cash 8300- 32
33 Partial pay ment of account. 33
34 34
35 35
 The following are the transactions of Mr. Carlo Duterte for the month of July, 20XX

July Withdrew cash for personal expenses,

15 P 2,000.
 General Jour nal
Page 1
1 2

Date Des cription P/R Debit Credit

20xx
1 July 1 Cash 1
2 M r. C. Duterte, Capital 975000- 2
3 The owner invested cash to star t 975000- 3
4 his own car rental business . 4
5 5
6 5 Equipm ent 600000- 6
7 Cash 300000- 7
8 Accounts Pay able 300000- 8
9 Purchas ed equipment on cash 9
10 10
11 7 Supplies 11
12 Accounts Pay able 30000- 12
13 Purchas ed supplies on credit. 30000- 13
14 14
15 10 Rent Ex pens e 6500- 15
16 Cash 6500- 16
17 Paid rent for the month. 17
18 18
19 13 Cash 10000- 19
20 Service Revenue 10000- 20
21 Cash received from cus tom ers . 21
22 22
23 15 M r. C. Duterte, Drawing 2000- 23
24 Cash 2000- 24
25 T he owner withdrew cash. 25
26 26
27 18 Accounts Receiv able 8750- 27
28 Service Revenue 8750- 28
29 Billed customer for rental. 29
30 30
31 20 Accounts Pay able 8300- 31
32 Cash 8300- 32
33 Partial pay ment of account. 33
34 34
35 35
 The following are the transactions of Mr. Carlo Duterte for the month of July, 20XX

July Billed customer for rental, P 8,750.

18
 Gener al Journal
Page 1
1 2

Date Description P/R Debit Credit

20xx
1 July 1 Cas h 1
2 Mr. C. Duterte, Capital 975000- 2
3 T he owner invested cash to s tart 975000- 3
4 his own car rental bus iness . 4
5 5
6 5 Equipment 600000- 6
7 Cas h 300000- 7
8 Accounts Pay able 300000- 8
9 Purchased equipment on cash 9
10 10
11 7 Supplies 11
12 Accounts Pay able 30000- 12
13 Purchased supplies on credit. 30000- 13
14 14
15 10 Rent Ex pens e 6500- 15
16 Cas h 6500- 16
17 Paid rent for the month. 17
18 18
19 13 Cas h 10000- 19
20 Serv ice Revenue 10000- 20
21 Cas h received from custom ers . 21
22 22
23 15 Mr. C. Duterte, Drawing 2000- 23
24 Cas h 2000- 24
25 T he owner withdrew cash. 25
26 26
27 18 Accounts Receivable 8750- 27
28 Serv ice Revenue 8750- 28
29 Billed cus tomer for rental. 29
30 30
31 20 Accounts Pay able 8300- 31
32 Cas h 8300- 32
33 Partial payment of account. 33
34 34
35 35
 The following are the transactions of Mr. Carlo Duterte for the month of July, 20XX

July Paid partial for the transaction on

20 July 7, P 8,300.
 General J ournal
Page 1
1 2

Date Description P/R Debit Credit

20xx
1 July 1 Cas h 1
2 M r. C. Duterte, Capital 975000- 2
3 The ow ner invested cash to star t 975000- 3
4 his own car rental bus iness . 4
5 5
6 5 Equipment 600000- 6
7 Cas h 300000- 7
8 Accounts Pay able 300000- 8
9 Purchased equipment on cash 9
10 10
11 7 Supplies 11
12 Accounts Pay able 30000- 12
13 Purchased s upplies on credit. 30000- 13
14 14
15 10 Rent Ex pense 6500- 15
16 Cas h 6500- 16
17 Paid rent for the m onth. 17
18 18
19 13 Cas h 10000- 19
20 Serv ice Rev enue 10000- 20
21 Cas h receiv ed f rom cus tom ers. 21
22 22
23 15 M r. C. Duterte, Drawing 2000- 23
24 Cas h 2000- 24
25 T he owner withdrew cash. 25
26 26
27 18 Accounts Receiv able 8750- 27
28 Serv ice Rev enue 8750- 28
29 Billed cus tomer f or rental. 29
30 30
31 20 Accounts Pay able 8300- 31
32 Cas h 8300- 32
33 Partial pay m ent of account. 33
34 34
35 35
 The following are the transactions of Mr. Carlo Duterte for the month of July, 20XX

 
July 1 Mr. C. Duterte invested P 975,000 to start his own car
rental business - CD Car Rental
5
Purchased equipment (three cars) for P 600,000, paying
P 300,000 down and agreed to pay the rest in 60 days.
7 Purchased supplies on credit, P 30,000.
10 Paid rent for the month, P 6,500.
13 Cash received from customers, P 10,000.
15 Withdrew cash for personal expenses, P 2,000.
18 Billed customer for rental, P 8,750.
20 Paid partial for the transaction on July 7, P 8,300.
 General Journal
Page 1
1 2

Date Description P/R Debit Credit

20xx
1 July 1 Cash 975000 1
2 Mr. C. Duterte, Capital 975000- 2
975000
3 The owner invested cash to start 975000- 3
4 his own car rental business. 4
5 5
6 5 Equipment 600000- 6
7 Cash 300000- 7
8 Accounts Payable 300000- 8
9 Purchased equipment on cash 9
10 10
11 7 Supplies 30000 11
12 Accounts Payable 30000- 12
30000
13 Purchased supplies on credit. 30000- 13
14 14
15 10 Rent Expense
Prepaid Rent 6500- 15
16 Cash 6500- 16
17 Paid rent for the month. 17
18 18
19 13 Cash 10000- 19
20 Service Revenue 10000- 20
21 Cash received from customers. 21
22 22
23 15 Mr. C. Duterte, Drawing 2000- 23
24 Cash 2000- 24
25 T he owner withdrew cash. 25
26 26
27 18 Accounts Receivable 8750- 27
28 Service Revenue 8750- 28
29 Billed customer for rental. 29
30 30
31 20 Accounts Payable 8300- 31
32 Cash 8300- 32
33 Partial payment of account. 33
34 34
35 35