1. @ 2012, Cengage Learning Analyzing Transactions LO 3 – Posting Journal Entries to Accounts

2.  The process of transferring the debits and credits from the journal entries to the accounts is called posting. LO 3 Posting Journal Entries to Accounts

3. On December 1, NetSolutions paid a premium of $2,400 for an insurance policy for liability, theft, and fire. The policy covers a one-year period. LO 3 Posting Journal Entries to Accounts

4. LO 3 Accounting Equation Impact Assets = Liabilities + Stockholders’ Equity Posting Journal Entries to Accounts increase decrease

5. Exhibit 4 - Steps in Posting Step 1. The date of the transaction is entered in the Date column of Prepaid Insurance. LO 3 Account Prepaid InsuranceAccount No. 15 DateItemRef.DebitCreditDebitCredit Post.. Balance Dec.1 2011 Dec.1Prepaid Insurance2,400 Cash2,400 Paid premium on one-year policy. Account Prepaid InsuranceAccount No. 15 DateItemRef.DebitCreditDebitCredit Post. Balance Dec.1 2011 Dec.1Prepaid Insurance2,400 Cash2,400 Paid premium on one-year policy.

6. Step 2. The amount ($2,400) is entered in the Debit column of Prepaid Insurance. LO 3 Account Prepaid InsuranceAccount No. 15 DateItemRef.DebitCreditDebitCredit Post. Balance Dec.1 2011 Dec.1Prepaid Insurance2,400 Cash2,400 Paid premium on one-year policy. 2,400 Exhibit 4 - Steps in Posting

7. Step 3. The journal page number (2) is entered in the account’s Post. Ref. column. LO 3 Account Prepaid InsuranceAccount No. 15 DateItemRef.DebitCreditDebitCredit Post. Balance Dec.1 2011 Dec.1Prepaid Insurance2,400 Cash2,400 Paid premium on one-year policy. 2,400 2 Exhibit 4 - Steps in Posting

8. LO 3 Step 4. The ledger account number (15) is entered in the journal’s Post. Ref. column. Account Prepaid InsuranceAccount No. 15 DateItemRef.DebitCreditDebitCredit Post. Balance Dec.1 2011 Dec.1Prepaid Insurance2,400 Cash2,400 Paid premium on one-year policy. 2,400 2 15 Exhibit 4 - Steps in Posting

9. Recording and Posting of a Debit and a Credit LO 3 These steps are repeated to post to the Cash account.