Let's start a business from scratch and see how to record many different journal entries.

Example #1: Journal Entries: Business Formation

Example #2: Journal Entries: Business Formation

Example #3: Journal Entries: Business Formation

Example #4: Journal Entries: Business Formation

Example #5: Journal Entries: Business Formation

Example #6: Journal Entries: Business Formation

Example #7: Journal Entries: Business Formation

Example #8: Journal Entries: Business Formation

Additional Problems
During May, the transactions for Andy's Consulting Company were as follows: May 5  : Paid $1,000 for back office supplies previously purchased on account May 8  : Performed consulting services on account for $7,200 May 9  : Purchased supplies for $850 on account May 23: Received an invoice for equipment repairs for $920 May 29: Paid $2,400 for a 12-month fire insurance policy. Coverage begins on June 1. Provide journal entries for these transactions.  
The purchase of office equipment at a cost of $3,200 by an immediate payment of $700 and agreement to pay the balance within 60 days is recorded by: a. A debit of $700 to Office Equipment, a debit of $2,500 to Accounts Receivable, and a credit of $3,200 to Accounts Payable. b. A debit of $3,200 to Office Equipment, a credit of $700 to Cash, and a credit of $2,500 to Accounts Receivable. c. A debit of $2,500 to Accounts Receivable, a debit of $700 to Cash, and a credit of $3,200 to Office Equipment. d. A debit of $3,200 to Office Equipment, a credit of $700 to Cash, and a credit of $2,500 to Accounts Payable.
Indicate the effect each of the following transactions has on the accounting equation (i.e., assets, liabilities, and equity). 1. ABC Company performed $2,000 of delivery services for a customer who agreed to pay next month. 2. ABC Company sold common stock to investors for $40,000 cash and borrowed $20,000 from the First Bank. 3. ABC Company paid $2,000 cash to the bank; $1,800 of this amount was the repayment of a bank loan and the other $200 paid was interest.
When a company performs services for cash, the effects on the fundamental accounting equation are: a. increase assets and decrease stockholders' equity b. increase assets and increase stockholders' equity c. increase liabilities and increase stockholders' equity d. increase assets and increase liabilities
The payment of an account payable would: a. decrease assets and increase owner's equity b. have no effect on total assets c. decrease assets and decrease liabilities d. decrease assets and increase liabilities
A business purchases equipment for cash of $85,000. This transaction will cause: a. capital to be credited for $85,000 b. cash to be debited for $85,000 c. equipment to be credited for $85,000 d. cash to be credited for $85,000
Performing a service for $500 cash and $700 on account would include a: a. debit to service revenue for $1,200 b. debit to accounts receivable for $700 c. credit to service revenue for $500 d. debit to cash for $1,200
The purchase of equipment for cash would: a. have no effect on total assets b. increase total assets and decrease liabilities c. increase total assets d. decrease both liabilities and owner's equity
Which of the following statements about assets is true? a. The issuance of stock to owners for cash would increase assets and decrease owners’ equity b. Purchasing equipment for cash would increase one type of asset and decrease another type of asset c. Paying a dividend to stockholders would decrease assets and increase stockholders’ equity d. Making a payment on a bank loan would decrease assets and stockholders’ equity