Case Study: Posting to the General Ledger (2.9)

Legacy Realty Company Profile

A sole proprietorship located in Washington, D.C., with a small staff of five people.

Legacy Realty Business Purpose

To own, lease, and manage its own rental properties (houses and condominiums).

Role of the General Ledger

Acts as the primary accounting system where journal entries are posted to provide summary data, rolling balances, and the underlying data required for financial statements.

General Ledger Entry (J1): Cash Contribution by Owner ($200,000 on 1/1/2023)

Cash (No. 101): Debited for $200,000 (Balance: $200,000) / Owner's Capital (No. 600): Credited for $200,000 (Balance: $200,000).

General Ledger Entry (J2): Purchase of Property ($75,000 total on 1/31/2023)

Building A (No. 300): Debited for $50,000 (Balance: $50,000)

Land (No. 350): Debited for $25,000 (Balance: $25,000)

Cash (No. 101): Credited for $75,000 (Rolling Balance: $125,000).

General Ledger Entry (J3): Incur Repairs Expense ($5,000 on 2/2/2023)

Repairs Expense (No. 905): Debited for $5,000 (Balance: $5,000) / Cash (No. 101): Credited for $5,000 (Rolling Balance: $120,000).

General Ledger Entry (J4): Purchase of Office Supplies on Account ($500 on 2/5/2023)

Office Expense (No. 910): Debited for $500 (Balance: $500) / Accounts Payable (No. 301): Credited for $500 (Balance: $500).

General Ledger Entry (J5): Collecting Rent ($1,500 on 3/1/2023)

Cash (No. 101): Debited for $1,500 (Rolling Balance: $121,500) / Revenue (No. 700): Credited for $1,500 (Balance: $1,500).