Journal Entry Examples: 14 Common Entries Explained
Journal entries are how every business transaction actually gets recorded — and the fastest way to learn them is by example. Below are 14 worked journal entry examples covering the situations small businesses hit most: sales, purchases, payroll, loans, depreciation, prepaids, deferred revenue, and the adjusting entries that close out a month. Each shows the debit, the credit, and the reasoning. (New to debits and credits themselves? Start with our plain-English guide to double-entry bookkeeping, then come back — this post is the examples library.)
The anatomy of a journal entry
Every entry has a date, at least one debit, at least one credit, equal totals on both sides, and a memo. By convention debits are listed first and credits are indented. That's the whole format — the skill is knowing which accounts to hit, which is what the examples below teach.
Everyday transaction entries
Cr Sales Revenue 500
Cash (an asset) increases with a debit; revenue increases with a credit.
Cr Sales Revenue 2,000
Cr Accounts Receivable 2,000
Note that no revenue is recorded at collection — it was already earned in entry 2. This pair is the heart of accrual accounting.
Cr Accounts Payable 3,500
Cr Cash 3,500
Cr Inventory 1,400
Cr Cash 2,400
Cr Owner Contributions 10,000
Cr Bank Loan Payable 25,000
Dr Interest Expense 150
Cr Cash 600
Splitting principal from interest is the most commonly botched everyday entry — booking the whole payment as an expense overstates costs and leaves the loan balance wrong on the balance sheet.
Adjusting entries (month-end)
Cr Accumulated Depreciation 500
Compute the amount with our free depreciation calculator.
Cr Prepaid Insurance 100
Cr Payroll Liabilities 4,000
Cr Subscription Revenue 500
Entries 11–14 are the adjusting entries that turn raw transaction data into accurate accrual statements. They are also exactly the entries software will not make for you automatically — the reason "my QuickBooks says something different from my accountant" is almost always missing adjustments.
From journal to trial balance
Post every entry to its account in the general ledger, total each account, and list the totals: debits in one column, credits in the other. If the two columns match, you have a trial balance — the raw material for the P&L and balance sheet. If they don't match, an entry above was one-sided or mistyped, and the difference itself is your first clue (a difference divisible by 9 classically signals transposed digits).
Set up the accounts before the entries
Every example above names an account — which assumes your account list exists and is sensible. That list is your chart of accounts, and starting from a clean one prevents most categorization errors before they happen. Download our free chart of accounts template (60+ accounts, QuickBooks import-ready), and if you would rather have every entry above handled for you each month, that is precisely what our bookkeeping service does.
Never Write a Journal Entry Again
Our Ex-PwC CA & ACCA team records, adjusts, and reconciles everything monthly — you just read the finished statements.
Doing it yourself? Grab the free chart of accounts template and convert statements with the bank statement converter.
Talk to a BookkeeperFrequently Asked Questions
The record of a single transaction in the books, showing which accounts are debited and credited, the amounts (which must be equal), the date, and a short memo. Every journal entry keeps the books balanced under double-entry bookkeeping.
In modern terms: debits increase assets and expenses; credits increase liabilities, equity, and revenue. Every entry's total debits must equal total credits. If you remember only one thing, remember that pair.
The journal is the chronological record where transactions are first entered; the ledger organizes those same entries by account. Software posts to both automatically — you enter the transaction once.
Entries made at period end to record activity that hasn't hit cash yet: accrued expenses, accrued revenue, depreciation, and the recognition of prepaid or deferred items. They are what makes accrual-basis statements accurate.
Mostly no — invoices, bills, and bank feeds create the entries behind the scenes. Manual journal entries are still needed for adjustments like depreciation, accruals, and corrections, which is where a bookkeeper typically steps in.
An entry dated the first day of the new period that undoes an accrual from the prior period, so the real invoice or payment can be recorded normally without double-counting. Common for accrued payroll and accrued expenses.