To journalize receiving a utility bill in May for $1,200 that will be paid on June 10, you would typically make an adjusting entry to record the expense and the liability incurred. Here's how you could journalize this transaction:
Date: May XX, 2023
- Debit: Utility Expense $1,200
- Credit: Accounts Payable $1,200
This entry reflects the recognition of the utility expense when the bill is received, and the liability created by the obligation to pay the amount due.
When you eventually make the payment on June 10, you would make the following journal entry:
Date: June 10, 2023
- Debit: Accounts Payable $1,200
- Credit: Cash $1,200
This entry reflects the payment of the utility bill and the reduction of the liability in Accounts Payable.