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General Journal

Given the following scenario...

Scenario: On March 1st, you purchase a new lemon squeezer for your lemonade stand with cash for $1,000.

...we could write the following journal entry:

TransactionDebitCredit
Equipment$1,000
     Cash$1,000

This journal entry, along with all others over a given period (in this case, the month of March), would be written in our lemonade stand's General Journal!

The General Journal is literally just an accumulation of all the journal entries that happen in a given period.

This General Journal might look like so (I've highlighted the journal entry above for visibility!)

MARCH

DateTransactionDebitCredit
3-1Equipment$1,000
     Cash$1,000
New lemon squeezer
3-5Cash$500
     Notes Payable$500
Borrow a loan from local bank
3-7Cash$250
     Common Stock$250
Issue common stock shares

A couple critical things to notice here...

In your General Journal, it's important to document the date in which each transaction occurred.

MARCH

DateTransactionDebitCredit
3-1Equipment$1,000
     Cash$1,000
New lemon squeezer
3-5Cash$500
     Notes Payable$500
Borrow a loan from local bank
3-7Cash$250
     Common Stock$250
Issue common stock shares

These align to the dates in which the 3 transactions occurred!

Typically, a General Journal contains way more than 3 journal entries. It can get really confusing keeping track of all of them. That's why it's crucial to throw a little description of what each journal entry represents below the respective entry!

MARCH

DateTransactionDebitCredit
3-1Equipment$1,000
     Cash$1,000
New lemon squeezer
3-5Cash$500
     Notes Payable$500
Borrow a loan from local bank
3-7Cash$250
     Common Stock$250
Issue common stock shares