On September 18, 2019, Afton Company purchased $2,475 of supplies on account. In Afton Company’s chart of accounts, the supplies account is No. 15

On September 18, 2019, Afton Company purchased $2,475 of supplies on account. In Afton Company’s chart of accounts, the supplies account is No. 15, and the accounts payable account is No. 21.

a. Journalize the September 18, 2019, transaction on page 87 of Afton Company’s two-column journal. Include an explanation of the entry.

b. Prepare a four-column account for Supplies. Enter a debit balance of $840 as of September 1, 2019. Place a check mark (¸) in the Posting Reference column.

c. Prepare a four-column account for Accounts Payable. Enter a credit balance of $10,900 as of September 1, 2019. Place a check mark (¸) in the Posting Reference column.

d. Post the September 18, 2019, transaction to the accounts.

e.  Do the rules of debit and credit apply to all companies?


Answer:

a.
Post.
Ref. Debit Credit
 2019
 Sept. 18 Supplies15 2,475
Accounts Payable 21 2,475
Purchased supplies on account.
b., c., d.
Post.
Ref. Debit Debit Credit
 2019
 Sept. 1 Balance  840
18 87 2,475 3,315
Post.
Ref. Debit Debit Credit
 2019
 Sept. 1 Balance 10,900
18 8713,375
e. Yes. The rules of debit and credit apply to all companies.