Depot was a retail store for personal computers and hand-held calculators, selling several national brands in each product line. The store was opened in early September by Thompson, a young woman previously employed in direct computer sales for a national firm specializing in business computers. Thompson knew the importance of adequate records. One of her first decisions, therefore, was to hire Jarrard, a local accountant, to set up her bookkeeping system. Jarrard wrote up the store’s preopening financial transactions in journal form to serve as an example (Exhibit 1). Thompson agreed to write up the remainder of the store’s September financial transactions for Jarrard’s later review.
Exhibit 1 General Journal
|Entry Number |Account |Debit(amount) |Credit(amount) | |(1) |Cash |165,000 | | | |Bank Loan Payable(15%, yearly interest rate) | |100,000 | | |Proprietor’s Capital | |65,000 | |(2) |Rent Expense(September) |1,485 | | | |Cash | |1,485 | |(3) |Merchandise Inventory |137,500 | | | |Accounts Payable | |137,500 | |(4) |Furniture and Fixtures(10-year life) |15,500 | | | |Cash |...
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