Question

Required information CC2-1 Accounting for the Establishment of a Business [LO 2-1, LO 2-2, LO 2-3, LO 2-4, LO 2-5) [The following information applies to the questions displayed below.) Nicole has decided that she is going to start her business, Nicole's Getaway Spa (NGS). A lot has to be done when starting a new business. Here are some transactions that have occurred prior to April 30. a. Received $91,000 cash when issuing 9,100 new common shares. b. Purchased land by paying $5,000 cash and signing a note payable for $9,000 due in three years. c. Hired a new aesthetician for a salary of $2,100 a month, starting next month. d. NGS purchased a company car for $29,000 cash (list price of $32,000) to assist in running errands for the business. e. Bought and received $1,000 in supplies for the spa on credit. f. Paid $200 of the amount owed in (e). 9. Nicole sold 100 of her own personal shares to Raea Gooding for $600. CC2-1 Part 1 Required: 1. Prepare journal entries for each of the entries. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)

Answer 1

Req. 1 a. 91,000 Cash (+A). Common Stock (+SE). 91,000 b. Land (+A) 13,000

Cash (-A) Note Payable (long-term) (+L). 5,000 9,000 C. This is an exchange of only promises, so it is not a transaction. d. 29,000 Equipment (+A) Cash (-A). 29,000 e. 1,000 Supplies (+A). Accounts Payable (+L). 1,000 f. 200 Accounts Payable (-L)_ Cash (-A). 200 g. No transaction. Separate entity assumption.