Second. Enter this statement in the journal and post to the ledger, debiting all accounts which represent assets and crediting all accounts which represent liabilities. Credit proprietor's account with the difference, which is the present worth.
If a new ledger is to be opened, new accounts will be opened for each form of asset or liability represented in the entry.
If the old ledger is to be used new accounts are to be opened with assets and liabilities not already represented by accounts in the ledger, and the net gain only will be credited to the proprietor's account. Check personal accounts, but do not post.
Third. Take a trial balance to see if the ledger is in balance, as it should be after posting these entries.
EXERCISE
Following the rules given, change the books of David Henry to double entry using the old ledger.
Show necessary journal entry and indicate what new accounts must be opened.
CHANGING PARTNERSHIP BOOKS TO DOUBLE ENTRY
12. We will suppose that the ledger illustrated in the following model set (pages 23-27) represents the business of Benton, Douglas, and Kemp, and that the books have been kept by single entry.
They wish to adopt the double entry method and call you in to make the necessary changes in their books.