Exercises: Journal entries and posting to the ledger

The owner of the taco shop «El Fogón Norte» contributes $\$50,000.00$ and deposits it into the business bank account. Write the corresponding journal entry: state the account that is debited, the one that is credited, and the amount, following the proper order of an entry (debit first, then credit).

The taco shop «El Fogón Norte» carries out these three transactions during the week:

1. It buys supplies (meat, tortillas, vegetables) on credit for $\$6,300.00$.

2. It records Saturday's sales, collected in cash, for $\$9,750.00$.

3. It pays $\$7,000.00$ for the shop's rent by bank transfer.

Write the three journal entries: in each one, state which account is debited, which one is credited, and for what amount.

The Bank account of the stationery shop «El Compás» sums up the week's movements in the general ledger as follows:

1. a) Compute the sum of the debits and the sum of the credits.
2. b) Work out the account balance and say whether it is a debit or a credit balance.
3. c) Explain in your own words what that balance means for the business.