A company’s trial balance failed to agree, the out of balance difference of $6,250 being posted to a suspense account.
Subsequent investigation revealed the difference was due to one side of an entry to record the purchase of machinery for $6,250, by cheque, failing to post to the plant and machinery account.
Make journal entries to correct the error.
Answer
Wrong entry / Suspense Account
Dr. Suspense Account………..6,250
Cr. Bank…………………………..….6,250
Adjusting Entry
Dr. Plant and machinery…..6,250
Cr. Suspense account………………6,250