Question

Cookie Creations 02 a-c (Part Level Submission)

After researching the different forms of business organization. Natalie Koebel decides to operate “Cookie Creations” as a proprietorship. She then starts the process of getting the business running. In November 2019, the following activities take place.

Nov. 8		Natalie cashes her U.S. Savings Bonds and receives $520, which she deposits in her personal bank account.
8		She opens a bank account under the name “Cookie Creations” and transfers $500 from her personal account to the new account.
11		Natalie pays $65 for advertising.
13		She buys baking supplies, such as flour, sugar, butter, and chocolate chips, for $125 cash. (Hint: Use Supplies account.)
14		Natalie starts to gather some baking equipment to take with her when teaching the cookie classes. She has an excellent top-of-the-line food processor and mixer that originally cost her $750. Natalie decides to start using it only in her new business. She estimates that the equipment is currently worth $300. She invests the equipment in the business.
16		Natalie realizes that her initial cash investment is not enough. Her grandmother lends her $2,000 cash, for which Natalie signs a note payable in the name of the business. Natalie deposits the money in the business bank account. (Hint: The note does not have to be repaid for 24 months. As a result, the note payable should be reported in the accounts as the last liability and also on the balance sheet as the last liability.)
17		She buys more baking equipment for $900 cash.
20		She teaches her first class and collects $125 cash.
25		Natalie books a second class for December 4 for $150. She receives $30 cash in advance as a down payment.
30		Natalie pays $1,320 for a one-year insurance policy that will expire on December 1, 2020.

Prepare journal entries to record the November transactions. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Record journal entries in the order displayed in the problem.)

Date Account Titles and Explanation Debit Credit (To record cash deposited in personal bank account) (To record amount transferred from personal account to Cookie creation account)

NOTE: THERE ARE TOTAL OF 10 ENTRIES

Answer 1

Journal Entries in the books of 'Cookies Creation'

Date	Account title & Explanation		Debit	Credit
08-Nov	Personal Bank Account Debit		520
	To cash A/C			520
	(To record cash deposit in a personal bank account)
08-Nov	Bank A/C     Debit		500
	To personal bank Account			500
	(To record amount transferred from personal bank account to cookie creation account)
11-Nov	Advertising Expenses Debit		65
	To Bank A/C			65
	(To record amount paid for advertisement )
13-Nov	Supplies A/C Debit		125
	To cash A/c			125
	(To record supplies purchased)
14-Nov	Equipment A/C debit		300
	To Common stock A/c			300
	(To record baking equipment transferred to business)
16-Nov	Bank A/C Debit		2000
	To notes payable			2000
	(To record amount received from grandmother against notes payable)
17-Nov	Equipment A/C debit		900
	To Bank A/c			900
	(To record purchase of new baking equipment)
20-Nov	Bank A/C Debit		125
	To Service Revenue A/c			125
	(To record revenue from teaching)
25-Nov	Bank A/C Debit		30
	Accounts Receivable A/C Debit		120
	To Unearned service Revenue A/C			150
	(To record Advance received for a class in December)
30-Nov	Prepaid Insurance Debit		1210
	Insurance expense Debit		110
	To bank A/C			1320
	(To record Insurance Expense Assuming Accounting period will Expire on 31 Dec, so 11-month insurance will be prepaid & one-month insurance will be current year insurance expense)