Which of the following journal entries correctly records Jayne Company's purchase of office supplies on account for \$1,200 during the month of June?

• A. Debit Office Supplies \$1,200; Credit Accounts Payable \$1,200
• B. Debit Office Supplies \$1,200; Credit Cash \$1,200
• C. Debit Accounts Payable \$1,200; Credit Office Supplies \$1,200
• D. Debit Cash \$1,200; Credit Office Supplies \$1,200

Answer: (A)

Verified step by step guidance

1. Step 1: Understand the transaction. Jayne Company is purchasing office supplies on account, meaning they are not paying cash immediately but instead creating a liability (Accounts Payable).
2. Step 2: Identify the accounts involved. The accounts affected are 'Office Supplies' (an asset account) and 'Accounts Payable' (a liability account).
3. Step 3: Determine the nature of the accounts. 'Office Supplies' will increase because the company is acquiring supplies, and 'Accounts Payable' will increase because the company owes money for the purchase.
4. Step 4: Apply the rules of debits and credits. Assets increase with a debit, so 'Office Supplies' will be debited. Liabilities increase with a credit, so 'Accounts Payable' will be credited.
5. Step 5: Write the journal entry. The correct journal entry is: Debit Office Supplies \$1,200; Credit Accounts Payable \$1,200. This reflects the increase in assets and liabilities due to the purchase on account.