The following errors took place in journalizing and posting transactions: a. The receipt of $8,400 for services rendered

The following errors took place in journalizing and posting transactions:

a. The receipt of $8,400 for services rendered was recorded as a debit to Accounts Receivable and a credit to Fees Earned.

b. The purchase of supplies of $2,500 on account was recorded as a debit to Office Equipment and a credit to Supplies.

Journalize the entries to correct the errors. Omit explanations.

Answer:

a. 

Cash 8,400

       Accounts Receivable 8,400

b. 

Supplies 2,500

        Office Equipment 2,500

Supplies 2,500

        Accounts Payable 2,500

Note:  The first entry in (b) reverses the incorrect entry, and the second entry records the correct entry. These two entries could also be combined into one entry as shown below; however, preparing two entries would make it easier for someone to understand later what happened and why the entries were necessary.

Supplies 5,000

       Office Equipment 2,500

       Accounts Payable 2,500