Compound journal entries
Objective: Build balanced entries with multiple debits or credits.
Recommended first: Your first journal entries
A compound entry has more than one debit or more than one credit. It still follows the same rule: total debits equal total credits.
Common cases: buying an asset with part cash and part loan; a sale partly paid now and partly on account; a loan payment split between principal and interest; one bill covering two kinds of expense.
Build compound entries in two passes. First list every account affected with its side; then fill in the amounts and check totals. If a transaction has a total and parts — a loan payment of $1,200 with $1,050 principal and $150 interest — make sure the parts add up to the total before entering anything. Compound entries are also where split-line rules matter: some exercises want one line per account.
Check your work
- Do the parts add up to the total?
- Is each account on the correct side?
- Is there exactly one line per account and side, unless splits are allowed?
Equipment costs $6,000. The business pays $1,000 cash and signs a note for $5,000.
| Account | Debit | Credit |
|---|---|---|
| Equipment | $6,000.00 | |
| Cash | $1,000.00 | |
| Notes Payable | $5,000.00 |
Common mistakes
✗ Recording only the cash portion of a purchase.
✓ Record the full cost of the asset and every source of funding.
Guided practice
Use hints freely here.
Item 1 of 2
Equipment: part cash, part note
On Mar 4, 2026, FixRight Appliance Repair buys diagnostic equipment costing $8,000.00. It pays $1,500.00 in cash and signs a note payable for the rest.
Independent practice
Try these without hints. Completing the lesson needs at least one independent item solved without revealing the answer.
Item 1 of 6
One payment, two expenses
On Mar 9, 2026, Peak Form Fitness Studio pays a single $350.00 card charge covering electricity ($285.00) and internet ($65.00) for the month.
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Key terms
- Compound entry
- A journal entry with more than two lines.
References and provenance
- OpenStax, Principles of Accounting, Volume 1: Financial Accounting (accessed 2026-10-29)
Original lesson written for Bookkeeping Exercises (AI-assisted drafting). Calculations are verified by the platform's automated accounting tests. Not yet reviewed by a credentialed accountant. Updated 2026-10-29.