Received Telephone Bill To Be Paid Next Month Journal Entry

Journal Entry For “Received $250 Telephone Bill For Previous Month, To Be Paid Next Month”.

When the company received telephone bill of $250 to be paid next month, then it is a Current Liability (Telephone Bill Payable Or Accounts Payable) for the company to pay the telephone bill for the previous month used (Benefits Enjoyed represent Telephone Expense) by the company during that period of time.

            Telephone Bill Expense a/c  $250

 

                                                          Telephone Bill Payable a/c / Accounts payable a/c  $250

                                            (Telephone Bill Expense Accrued For The Period)

Effect Of $250 Telephone Bill For Previous Month, To Be Paid Next Month On Accounting Equation

                         Assets   =                    Liabilities                  +                       Equity

                            0       =    +Telephone Bill Payable    +      (-Telephone Bill Expense)

                            0       =                   +$250                    +                      (-$250)

                            0       =                                                  0

Telephone Bill Expense affects Equity as it is related with the profitable activities of the owners of the business. So it is deducted from equity by the amount of $250 on right side of the accounting equation. Telephone Bill Payable is added to Liabilities as it represents the unpaid amount, which is to be paid in the next month by the company for the previous month. So, it is added to liabilities on the right side and hence the accounting equation remains in balance.Journal Entry For “Received $250 Telephone Bill For Previous Month, To Be Paid Next Month”.

So, it is added to liabilities on the right side and hence the accounting equation remains in balance.