[court_nye]

I need help! On June 8th a truck was purchased for $18,000, paying $10,000 in cash and giving a note payable for the remainder. So I made a journal entry debiting truck $18,000, crediting cash $10,000, and crediting notes payable $18,000. Then on the 24th an invoice is received for the truck expenses, to be paid the next month, $1,000. So I debited notes payable $1,000 and credited truck expense $1,000 and my unadjusted trial balance was off! My debit balance was $18,000 more than my credit balance. What did I do wrong? I'm confused... HELP!:eek:

[CaptainForest]

On June 8, the JE SHOULD be:
Dr. Truck 18,000
Cr. Cash 10,000
Cr. Notes Payable 8,000 (not 18,000)

On June 24,
Dr. Notes Payable 1,000
Cr. Cash 1,000

[bhet]

On June 8, the JE SHOULD be:
Dr. Truck 18,000
Cr. Cash 10,000
Cr. Notes Payable 8,000 (not 18,000)

On June 24,
Dr. truck expense 1,000
Cr. Notes payable 1,000

The invioce received is different from the notes payable for the purchase of the truck. The new invioce is for the expenses for the month for the use of the eqpt.

[CaptainForest]

The second part would be:

Dr. Truck Expense 1,000

And

CR. ACOUNTS PAYABALE 1,000 (since its due in the next month)

[bhet]

Oops my bad. Notes payable is for long term debts. Since it is due next month, accounts payable is more appropriate than notes payable.:)