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:
| Transaction | Debit | Credit |
|---|---|---|
| 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
| Date | Transaction | Debit | Credit |
|---|---|---|---|
| 3-1 | Equipment | $1,000 | |
| Cash | $1,000 | ||
| New lemon squeezer | |||
| 3-5 | Cash | $500 | |
| Notes Payable | $500 | ||
| Borrow a loan from local bank | |||
| 3-7 | Cash | $250 | |
| Common Stock | $250 | ||
| Issue common stock shares |
A couple critical things to notice here...