Journal Entries
Record prepayments, bills, draws, loan payments, and depreciation correctly.
Pen and paper is fine · no calculator needed why?
Opens at level 26.
Lesson and untimed practice
Read the full lesson and try each skill without a clock. About 3 minutes to read.
skills · practice stats
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Pick the journal entry not tried yet
worked example
A customer prepays $3,200 for work you'll do next month. Which entry records the payment today?
- Debit Accounts receivable $3,200 / Credit Revenue $3,200
- Debit Unearned revenue $3,200 / Credit Cash $3,200
- Debit Cash $3,200 / Credit Revenue $3,200
- Debit Cash $3,200 / Credit Unearned revenue $3,200
Answer: Debit Cash $3,200 / Credit Unearned revenue $3,200
- Cash goes up: debit. Unearned revenue (a liability: work you owe) goes up: credit. It becomes revenue when the work is done.
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Split a loan payment not tried yet
worked example
A loan balance is $8,000, and this month's interest is 1% of the balance. You pay $630. How much should be debited to the loan account (principal)?
Answer: $550.00
- Interest = $8,000 × 1% = $80 (debit interest expense).
- The rest, $630 − $80 = $550, reduces the loan (debit loan payable). Credit cash $630.
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Cash balance after the entries not tried yet
worked example
Cash starts at $16,200. This month: pay a $2,350 supplier bill, record $500 of depreciation, pay a $5 bank fee, and receive $3,500 invested by the owner. What is the ending cash balance?
Answer: $17,345.00
- Cash in: $3,500. Cash out: $2,350 + $5 = $2,355.
- Ending cash = $16,200 + $3,500 − $2,355 = $17,345.
- Not cash: depreciation (no cash moves).
rest ladder
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