Received And Paid Telephone Bill Journal Entry

Received And Paid Bill For Telephone Service Journal Entry

When the company or corporation received bill for telephone service from supplier of telephone services, then it creates a Current Liability (Utilities Payable Account) for the corporation as the corporation still not paid to supplier of telephone services. Telephone Expense which is an example of Utilities Expense Account is also created.

To make journal entry for received and paid telephone bill, we can record either one single entry or two journal entries i.e., One for received and other for paid telephone bill but the result will be the same under both ways.

Example, A corporation received and paid telephone bill of Rs. 10000 for telephone services. What is the journal entry?

Single Journal Entry Method:

                                                    Telephone Expense a/c  10000

 

                                                                                           Cash a/c  10000

 

                                                            (Telephone Bill Received and Paid)

Two Journal Entries Method:

Received Telephone Bill Journal Entry

When the telephone bill received:

(a)

                                                         Telephone Expense a/c  10000

 

                                                                                                     Utilities Payable a/c  10000

 

                                                                    (Received Telephone Bill)

When the company actually paid the telephone bill for telephone services, we write off utilities payable account as shown below:

(b)

Paid Telephone Bill On Account Journal Entry

                                                               Utilities Payable a/c  10000

 

                                                                                                    Cash a/c  10000

 

                                                                    (Paid Telephone Bill On Account)

If we combine (a) and (b), we get the following journal entry:

                                                                  Telephone Expense a/c  10000

 

                                                                                                              Cash a/c  10000

So, if the company received and paid telephone bill for telephone services, then we debit telephone expense account and credit cash or bank account.