1. Journal and Adjusting Entries

2. Rules To Remember • Accounts are not your checking or saving accounts • They are storage devices for your financial transactions • When a Bank “Credits Your Account” for your deposits it is because your money is a Liability to them …. Our transactions are the opposite of the banking transactions

3. Rules To Remember • Assets have a Normal Balance of DEBIT • To increase an Asset, make a Debit Entry • To decrease an Asset, make a Credit Entry • Liabilities have a Normal Balance of Credit • To increase a Liability, make a Credit Entry • To decrease a Liability, make a Debit Entry

4. Rules To Remember • Equity has a Normal Balance of Credit • To increase an Equity, make a Credit Entry • To decrease an Equity, make a Debit Entry • Revenues have a Normal Balance of Credit • To increase a Revenue, make a Credit Entry • To decrease a Revenue, make a Debit Entry • Expenses have a Normal Balance of DEBIT • To increase an Expense, make a Debit Entry • To decrease an Expense, make a Credit Entry

5. Rolon Kern Invested $1,200 in cash and $100 in Office Supplies to start Company

6. Paid rent 3 months in advance $300

7. Purchased Office Equip on Account $50

8. Purchased Office Supplies for Cash $40

9. Collected $400 in cash for services Rendered

10. Paid Home Electric Bill from Company Funds $20

11. Provides services for $100, client will pay next month

12. Paid wages $60

13. Placed ad for $70, will pay next month

14. Balances as of 1-31-07 (Before Adjustments)

15. Balances as of 1-31-07 (Before Adjustments)

16. Adjusting EntryOffice Supplies on hand total $6

17. Adjusting EntryRent Expense For Month $100

18. Adjusting EntryOffice Equip Depr $20

19. Adjusting EntryOwe Employees $50 at end of month

20. Balances as of 1-31-07 (After Adjustments)

21. Income Stmt & Balance Sheet as of 1-31-07 (After Adjustments)