Question

On October 3, 2018, Regal Company purchased $3,600 of supplies on account. In Regal’s chart of accounts, the supplies account is No. 15, and the accounts payable account is No. 21. Required: A. Journalize and insert the posting references for the October 3, 2018, transaction on page 91 of Regal Company’s two-column journal. B. Prepare a four-column account for Supplies. Enter a debit balance of $770 as of October 1, 2018. Enter “Balance” in the Item column and place a check mark (√) in the Posting Reference column. C. Prepare a four-column account for Accounts Payable. Enter a credit balance of $26,200 as of October 1, 2018. Enter “Balance” in the Item column and place a check mark (√) in the Posting Reference column. D. Post and insert posting references for the October 3, 2018, transaction to the accounts. E. Do the rules of debit and credit apply to all companies? CHART OF ACCOUNTS Regal Company General Ledger ASSETS 11 Cash 12 Accounts Receivable 13 Land 14 Prepaid Rent 15 Supplies 16 Equipment 17 Automobiles LIABILITIES 21 Accounts Payable 22 Unearned Rent 23 Notes Payable 24 Salaries Payable EQUITY 31 Common Stock 32 Retained Earnings 33 Dividends REVENUE 41 Fees Earned 42 Sales Commission EXPENSES 51 Advertising Expense 52 Automobile Expense 53 Insurance Expense 54 Rent Expense 55 Wages Expense 56 Supplies Expense 57 Utilities Expense 58 Miscellaneous Expense A. Journalize and insert the posting references for the October 3, 2018, transaction on page 91 of Regal Company’s two-column journal. PAGE 91 JOURNALACCOUNTING EQUATION DATE DESCRIPTION POST. REF. DEBIT CREDIT ASSETS LIABILITIES EQUITY Oct. 3 Supplies 15 account payable 21 4,125.00 B. Prepare a four-column account for Supplies. Enter a debit balance of $770 as of October 1, 2018. Enter “Balance” in the Item column and place a check mark (√) in the Posting Reference column. C. Prepare a four-column account for Accounts Payable. Enter a credit balance of $26,200 as of October 1, 2018. Enter “Balance” in the Item column and place a check mark (√) in the Posting Reference column. D. Post and insert posting references for the October 3, 2018, transaction to the accounts. LEDGER DATE ITEM

Answer 1

• All working forms part of the answer
• Requirement A

Date	Description	Debit	Credit	Assets	Liabilities	Equity
03-Oct-18	Supplies (15)	$               3,600.00		$           3,600.00	$                              -	$                        -
	Accounts payable (21)		$               3,600.00	$                        -	$                 3,600.00	$                        -
	(Supplies purchased on account)

• Other requirements-----

SUPPLIES LEDGER:

					Balance
Date	Item	Post Ref	Debit	Credit	Debit	Credit
01-Oct-18	Balance				$                     770.00
03-Oct-18	Accounts payable	21	$               3,600.00		$                 4,370.00

ACCOUNTS PAYABLE LEDGER:

					Balance
Date	Item	Post Ref	Debit	Credit	Debit	Credit
01-Oct-18	Balance					$         26,200.00
03-Oct-18	Supplies	15		$           3,600.00		$         29,800.00

• Yes, the Debit Credit Rule applies to all the companies in general sense. It’s the very base of accounting process.