diff --git a/README.md b/README.md
index 560f5e75e..efd238c10 100644
--- a/README.md
+++ b/README.md
@@ -72,7 +72,7 @@ Running the program should produce a log similar to:
 
 ```rust
 Entry { num_hashes: 0, id: [0, ...], event: Tick }
-Entry { num_hashes: 2, id: [67, ...], event: Transaction { data: [37, ...] } }
+Entry { num_hashes: 3, id: [67, ...], event: Transaction { data: [37, ...] } }
 Entry { num_hashes: 3, id: [123, ...], event: Tick }
 ```
 
diff --git a/diagrams/historian.msc b/diagrams/historian.msc
index 0a97b70c6..91e93539d 100644
--- a/diagrams/historian.msc
+++ b/diagrams/historian.msc
@@ -4,10 +4,10 @@ msc {
   logger=>historian [ label = "e0 = Entry{id: h0, n: 0, event: Tick}" ] ;
   logger=>logger [ label = "h1 = hash(h0)" ] ;
   logger=>logger [ label = "h2 = hash(h1)" ] ;
-  client=>historian [ label = "Claim(d0)" ] ;
-  historian=>logger [ label = "Claim(d0)" ] ;
+  client=>historian [ label = "Transaction(d0)" ] ;
+  historian=>logger [ label = "Transaction(d0)" ] ;
   logger=>logger [ label = "h3 = hash(h2 + d0)" ] ;
-  logger=>historian [ label = "e1 = Entry{id: hash(h3), n: 2, event: Claim(d0)}" ] ;
+  logger=>historian [ label = "e1 = Entry{id: hash(h3), n: 3, event: Transaction(d0)}" ] ;
   logger=>logger [ label = "h4 = hash(h3)" ] ;
   logger=>logger [ label = "h5 = hash(h4)" ] ;
   logger=>logger [ label = "h6 = hash(h5)" ] ;
diff --git a/src/log.rs b/src/log.rs
index cc5881b2b..68a437d6b 100644
--- a/src/log.rs
+++ b/src/log.rs
@@ -56,23 +56,27 @@ pub fn extend_and_hash(id: &Sha256Hash, val: &[u8]) -> Sha256Hash {
     hash(&hash_data)
 }
 
-/// Creates the hash 'num_hashes' after start_hash, plus an additional hash for any event data.
+/// Creates the hash 'num_hashes' after start_hash. If the event contains
+/// signature, the final hash will be a hash of both the previous ID and
+/// the signature.
 pub fn next_hash<T: Serialize>(
     start_hash: &Sha256Hash,
     num_hashes: u64,
     event: &Event<T>,
 ) -> Sha256Hash {
     let mut id = *start_hash;
-    for _ in 0..num_hashes {
+    let sig = get_signature(event);
+    let start_index = if sig.is_some() { 1 } else { 0 };
+    for _ in start_index..num_hashes {
         id = hash(&id);
     }
-    match get_signature(event) {
-        None => id,
-        Some(sig) => extend_and_hash(&id, &sig),
+    if let Some(sig) = sig {
+        id = extend_and_hash(&id, &sig);
     }
+    id
 }
 
-/// Creates the next Tick Entry 'num_hashes' after 'start_hash'.
+/// Creates the next Entry 'num_hashes' after 'start_hash'.
 pub fn next_entry<T: Serialize>(
     start_hash: &Sha256Hash,
     num_hashes: u64,
diff --git a/src/logger.rs b/src/logger.rs
index 627ce75e6..ae54dd182 100644
--- a/src/logger.rs
+++ b/src/logger.rs
@@ -61,6 +61,7 @@ impl<T: Serialize + Clone + Debug> Logger<T> {
     pub fn log_event(&mut self, event: Event<T>) -> Result<(), (Entry<T>, ExitReason)> {
         if let Some(sig) = get_signature(&event) {
             self.last_id = extend_and_hash(&self.last_id, &sig);
+            self.num_hashes += 1;
         }
         let entry = Entry {
             id: self.last_id,