Question

Crane Company had the following two transactions related to its delivery truck.1. Paid $44 for an oil change.2. Paid $519 to install special shelving units, which increase the operating efficiency of the truck.Prepare Crane Company's journal entries to record these transactions. Use the format given below:No. Account Titles and Explanation Debit Credit1. 2.

Answer 1

Part a: The journal entry for the oil change is:

Maintained and Repair Expense A/c.....Dr. $44

Cash A/c....Cr. $44

Part b: The journal entry for equipment is:

Equipment A/c.....Dr. $519

Cash A/c.....Cr. $519

Journal entry refers to the first step of the accounting cycle in which all the business transactions are recorded in the books of accounts. The journal entry involves at least two accounts along with the credit and debit accounts.

Part a:

Maintained and Repair Expense A/c.....Dr. $44

Cash A/c....Cr. $44

(Being maintenance and repair charges paid)

Part b:

Equipment A/c.....Dr. $519

Cash A/c.....Cr. $519

(Being equipment installation charges)

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