## Journal Entry Practice Scenarios
1. August 1: The owner invests
$50,000 cash into the business.
2. August 2: The business purchases
$12,000 of office equipment using
cash.
3. August 3: The business borrows
$20,000 from the bank by signing a
note payable.
4. August 4: Services are performed for
a client who pays $3,500 cash
immediately.
5. August 5: The business buys $800 of
office supplies on account from
Supplies Inc.
6. August 7: The business performs
services for a client and bills them
$5,000. The client will pay later.
7. August 9: The business pays the
$800 it owes to Supplies Inc.
8. August 12: The owner withdraws
$1,000 cash for personal use.
9. August 15: The business pays $2,200
for employee salaries for the first half
of the month.
10. August 16: The business receives
$5,000 from the client billed on
August 7.
11. August 18: The business prepays
$6,000 for a six-month insurance
policy.
12. August 20: The business pays $400
for the current month's utility bill.
13. August 21: Land is purchased for
$100,000. A down payment of
$15,000 cash is made, and the rest is
financed with a mortgage payable.
14. August 22: The business receives a
$700 bill for advertising that will be
paid next month.
15. August 24: The business pays a
$2,000 cash dividend to its
stockholders. (Assume the business is
a corporation).
16. August 25: The business sells $500
worth of inventory to a customer on
account. The inventory originally cost
$300. (Record both the sale and the
cost of goods sold).
17. August 26: The business purchases
$4,000 of inventory on credit.
18. August 27: The business pays $250
cash for miscellaneous expenses.
19. August 28: The customer from
August 25 returns $100 worth of
inventory. The inventory had a cost
of $60. (Record both the sales return
and the inventory return).
20. August 29: The business receives a
payment of $3,000 from a customer
for services to be performed next
month (unearned revenue).
21. August 30: The business pays
$1,500 towards the principal on its
bank loan (from August 3).
22. August 30: The business pays $50 in
interest on the bank loan.
23. August 31: The business accrues
$2,200 in salaries that have been
earned by employees but will be paid
in September.
24. August 31: A physical count shows
$300 of the office supplies (from
August 5) have been used. (This is an
adjusting entry).
25. August 31: One month of the prepaid
insurance (from August 18) has
expired. (This is an adjusting entry).
