When posting a journal entry how would I post the following.
March 9 Completed a 7,500 project for a client who must pay within 30 days.
March 22 Received 3,500 cash as a partial payment fro the work completed on March 9
Please help immediately
thanks
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The journal is a chronological record of transactions, showing an explanation of each transaction, the accounts affected, whether the accounts are increased or decreased and by what amount.
You will need, of course, the date, the name of the account debited or credited, the amount, and a short description of the transaction is optional. A compound is efficient, showing both the Accounts Receivable and the Accounts Payable.
The entry first should look like
A/R
Income earned (or whatever term is used for revenues)
Be sure to use the date and make some explanation for which project is being charged
The second looks like
Cash
A/R for the account
Again, remember the date and make some explanation.
To post the journal entries for the given transactions, you would follow these steps:
1. Identify the accounts affected:
- For the first transaction, "Completed a 7,500 project for a client who must pay within 30 days," the accounts affected would be "Accounts Receivable" (A/R) and "Income earned" (or the specific revenue account related to the project).
- For the second transaction, "Received 3,500 cash as a partial payment for the work completed on March 9," the accounts affected would be "Cash" and "Accounts Receivable" (A/R).
2. Determine whether each account is being debited or credited:
- Debit increases assets and expenses, and credit decreases them.
- Credit increases liabilities, equity, and revenue, and debit decreases them.
3. Create the journal entry format:
- Date: March 9th
- Transaction 1:
- Debit: Accounts Receivable (for the client who must pay within 30 days)
- Credit: Income earned (or the specific revenue account related to the project)
- Date: March 22nd
- Transaction 2:
- Debit: Cash (for the amount received)
- Credit: Accounts Receivable (for the client's partial payment)
Here's how the journal entries would look:
March 9th:
Accounts Receivable (Debit) - 7,500
Income earned (Credit) - 7,500
March 22nd:
Cash (Debit) - 3,500
Accounts Receivable (Credit) - 3,500
Remember to include the date and a brief explanation of the transaction. This journal entry format helps keep a chronological record of transactions and ensures accurate recording of financial events.