Question

Journal Entry for Asset Purchase Prepare a journal entry for the purchase of office supplies on November 2 for $4,100, paying $405 cash and the remainder on account. If an amount box does not require an entry, leave it blank. Nov, 2

Answer 1

The basic principle of journal entry is "Debit what comes in, and Credit what goes out".

In specific, increase in asset should be debited. And decrease in asset should be credited.

The basic rule of accounting is stated bellow

1. Asset - Increase - Debit
2. Liability - Increase - Credit
3. Expense - Increase - Debit
4. Income - Increase - Credit
5. Capital - Increase - Credit

If these are Decreasing then it is just opposite of the above

So journal entry is

Journal

Date	particulars	debit($)	credit($)
Nov.2	office supplies A/C dr	4100
	To Cash A/C		405
	To Bank A/C		3695
	( Office supplies asset worth $4100 purchased and $405 paid  In cash and remaining $3695 paid through bank)