Ask Experts Questions for FREE Help !
    angelbaby's Avatar
    angelbaby Posts: 1, Reputation: 1
    New Member

    Oct 3, 2005, 01:19 PM
    Cash Payment Journal
    On December 17 On your Mark paid $1,500 to Keystone Insurance company for the premium of on a six month insurance policy, Check 1001.

    I got the Account name which is Keystone Insurance Company but then I don't know what the $1500 goes in there is General Debit / Credit, Accounts Payable Debit, Purchases Discount Credit, Cash in bank credit.

    Then the other one I don't get is

    On December 24 On your mark paid $2,254 to Pro Runner wearhouse for merchandise purchased on account, $2,300 less a discont of $46, check 1003.
    Coger's Avatar
    Coger Posts: 4, Reputation: 2
    New Member

    Oct 17, 2005, 02:48 PM
    First of all you actually paid a bill, so you should know that cash has been reduced, this means you credit cash

    Secondly, it sounds as though you paid the insurance bill ahead of time so you have pre-paid asset, which you will have to adjust every month until the insurance has been used.

    Look at tis entry: Dr. Prepaid Insurance 1.500
    Cr. Cash 1,500
    Make your comments if necessary.

    Now six months of 1,500 is 250 a month. 1500/6 = 250

    So I think the first expired month it should go like this:
    Dr. Insurance expense
    Cr. Prepaid Insurance expense

    See if that works for you

    Now Accouts payable would not be correct as it address services/products you provide to a customer.
    Puchase discounts refers to products or inventory you may have purchased from a company, and they will give you a discount if you pay their bill early.

    Are you with me so far?

    Have to run will be back

Not your question? Ask your question View similar questions


Question Tools Search this Question
Search this Question:

Advanced Search

Add your answer here.

Check out some similar questions!

Cash receipts journal [ 2 Answers ]

OK.. i.m using a cash reciepts journal.. and the transaction is... "recieved cash on account from wayne miller for chairs purchased may 25on s147 for $157.50, less discount (2%)." OK.. i.m so confused.. where does everything go?? Please help..

Double payment [ 1 Answers ]

Recently a large municipal government has made news headlines after it was discovered that frequent double payments of vendor invoices had occurred. Some of these double payments had significant dollar values attached to them. What procedural recommendations would you make to ensure that a...

Payment over time [ 3 Answers ]

Present Values. A famous quarterback just signed a $15 million contract providing $3 million a year for 5 years. A less famous receiver signed a $14 million 5-year contract providing $4 million now and $2 million a year for 5 years. Who is better paid? The interest rate is 10 percent.

Demands for Payment [ 2 Answers ]

I live in the state of Virginia. I have an outstanding debt with a payday loan company. When I finally made an attempt to pay the debt, the money was refused because I had sent it to the wrong address. I talked to the company and they refuse to accept the amount of payment being offered. I was...

Cash to accrual journal entries [ 0 Answers ]

What are the journal entries used when you convert from an accrual to a cash accounting method? And what is the theory behind these journal entries? Thanks, Michael

View more questions Search