and now let's finally make journal entries we remember the accounting cycle in the days
before the computer involved several steps before we could find our accumulated totals in the trial
balance now with the computer we can go directly from the journal and it will automatically post
the transactions foot the accounts and copy the results to the trial balance in a split second so
all those previous steps we learned about in the prior video happen immediately so all we have to
do is record the transaction in the journal and the results change in the trial balance like that
so if you are using quickbooks online this is the window that you would enter the transaction
in and then the accounts would change immediately in your quickbooks online trial balance and i'm
going to demonstrate this in quickbooks online if you're using QuickBooks desktop this would
be the window that you would record the debits and credits of a journal entry and again in QuickBooks
desktop the results in the trial balance would be updated immediately so first we will do these
transactions with QuickBooks desktop and we will do the same transactions as before let's
get prepared I have my QuickBooks desktop with a blank general company open and for those of you
who are new to QuickBooks you would open the trial balance by clicking reports accountant and taxes
trial balance and for those of you who are new to my class we always change the date range to
all transactions regardless of date and I'm going to change the shape so we can put it here and put
next to this window the window that we actually record the journal entries in from the main
menu click company make journal entry and then this little pop up don't worry about assigning
numbers just click the don't bother me box and click OK now you can't see much of this window
unless you double click the words in the ribbon to collapse the ribbon now the top half looks a
little bit more like the general journal that we learned about and let's read our transactions and
remember as soon as we record the transaction in the journal it will automatically post the
accumulated results to the trial balance now let's do the same transactions that we did earlier in
the course except now we'll do them on QuickBooks let's imagine on January 1 of 2025 the owner
invested $50,000 cash into the business if you learn your debits and credits properly you would
know that that would be $50,000 cash debit and $50,000 owners capital credit first we put in the
correct date by clicking the date box and going forward or backward or even typing it in manually
you should remove this checkmark because this is not an adjusting entry we will talk about those
a little bit later to record a journal entry in QuickBooks desktop click directly under the word
account then click the pull down arrow and choose the account you want to debit I choose cash in
Chase Bank and on the same row as that account I click under the word debit and type in the $50,000
if I keep clicking tab or pushing the tab key you will see that most software finishes the journal
entry for you by trying to balance it out in other words QuickBooks knows that there has to be a
50,000 dollar credit somewhere and that account is owners capital so this is the way that debit and
credit would look like in the general journal cash and bank debit owners capital credit now before
we save it the trial balance is blank but when I click Save and close you can see the numbers show
up for the first time on the trial balance cash in Chase Bank 50,000 and owners capital 50,000 now
let's imagine that on January 5th we pay 20,000 more for more equipment if you studied your debits
and credits properly that would be equipment debit and cash credit so company make general journal
entry okay the date is January 5th of 2025 this is our second entry it's not an adjusting entry and
the account that will be debit will be equipment and the amount will be 20,000 keep pushing the tab
key and the credit or in the row of credit the other account is cash because we know that if
we pay cash and get equipment its equipment debit cash credit now here's the question what will the
results be after I save this transaction well cash right now is 50,000 so if I make a credit
of 20,000 what do you think the result would be that's right the result would be 30,000 what about
this what do you think the equipment would be well equipment distorting it's zero so if I save this
equipment should show up for the first time as twenty thousand save and close and don't worry
about this just click the don't bother me box click OK aha cash went down to thirty thousand
exactly as we expected and equipment showed up in the trial balance for the first time as twenty
thousand what about this one January 10 the owner took home equipment worth $5,000 and he's not
using it for business anymore well if you studied your debits and credits you would know that that
would be equipment credit and owners withdrawals a debit again we click company make general journal
entry in this case the date is on the tenth and this is our third such journal entry I'm gonna
double click here so we can see it nicely and now I'm going to choose owners withdrawals debit and
put in the row of debit five thousand and I'm gonna tab over until it puts a credit of five
thousand and I'm gonna credit equipment now here's the question can you predict the results what will
equipment become well equipment right now is twenty thousand so for decreasing it by five
thousand it should become fifteen thousand if we did this right and what will withdrawals become
well withdrawals will show up for the first time here as five thousand save and close aha equipment
is down to fifteen thousand and owners withdrawals is five thousand on the debit side it means we
recorded the transaction correctly what about this one January 15th we borrowed thirty five thousand
from the bank what will cash become well right now cash is only 30,000 so if we borrow more from the
bank we'll have more cash so if we record this transaction properly cash and bank will become
65,000 and bank loan will show up for the first time in the trial balance so we change the date
to the 15th and we make a debit to cash and bank for the 35,000 because we learned that when cash
increases it's a debit and the balancing credit is here bank loan and when I click Save and close the
numbers are exactly as we expected cash becomes 65,000 and bank loan shows up for the first time
as 35,000 now we'll do a transaction that would absolutely require a journal entry what if on
January 20 the owner invested a vehicle worth twenty five thousand into the business what
would be debit and what would be credit well we know capital would be credit because the owner
invested in asset and capital right now has a credit balance of fifty thousand so if the owner
invests another twenty five thousand an asset that's right capital will become seventy five
thousand and vehicle will show up for the first time in the trial balance so from the main menu
company make journal entry this time the date is January 20 and the account that's debit is the new
asset that we are getting vehicle and we said that the vehicles are twenty five thousand or at least
they're worth twenty five thousand at the moment the owner invests it into the company and because
the asset came from the owner the owner now has more capital and we make a credit to capital to
increase the owners capital when we click Save and close capital became the number that we expected
it to become and therefore we recorded the journal entry properly now here's one that you might not
need to make a journal entry for but it is one we learned before 3000 to decrease the bank loan well
if this account represents what the bank loan is now and what we owe if we decrease it what will it
become if we record this properly it should become 30 mm and what will cash become well if we pay to
decrease the bank loan cash will decrease by 3,000 and it will become 62,000 so we're up to January
25th and we know that it will be cash credit because we are giving cash so cash and Chase
Bank credit by the 3,000 and we know that we're decreasing the bank loan and the bank loan is a
liability so it will be bank loan debit now when we click Save and close the results are exactly as
what we expected the bank loan became 32,000 and cash and Bank became 62,000 let's finish
with a transaction that you would definitely need to make a journal entry for let's imagine
on January 27th we borrowed 17,000 more from the bank and bought equipment that would be the same
thing as just taking the equipment and assuming alone in that case you have more equipment but
you also have a higher balance or more of a bank loan so we know that would be equipment debit and
bank loan credit so company make journal entry and this one is on January 30th and it will be
equipment debit for the 17,000 and it will be bank loan credit can you predict what the results will
be well let's see if equipment goes up if bank loan goes up by 17,000 bank loan should become
49,000 because bank loan is 32,000 right now and if equipment goes up by 17,000 equipment
should become 32,000 because these are the numbers for equipment and bank loan before I click Save
and when I click Save and close you can see the numbers are exactly as what we predicted bank loan
is 49,000 and equipment is 32,000 don't forget to watch the quickbooks online version of this video