Journal entries for Correcting Suspense Account (video below)

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

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