You decide to start your own corporation, a cookie company. In which you will be teaching baking classes. In November 2015, the following activities take place.
Nov. 8 You open a bank account under the name of your business and transfer $500 from your personal account to the new account in exchange for common stock.
11 You pay $65 to have advertising brochures and posters printed. You plan to distribute these as opportunities arise. (Hint: Use Advertising Expense.)
13 You buy baking supplies, such as flour, sugar, butter, and chocolate chips, for $125 cash.
14 You have an excellent top-of-the-line food processor and mixer that originally cost you $750. You decide to start using it only in your new business. You estimate that the equipment is currently worth $300. You invest the equipment in the business in exchange for common stock.
16 You realize that your initial cash investment is not enough. Your friend lends you $2,000 cash, for which you sign a note payable in the name of the business. You deposit the money in the business bank account. (Hint: The note does not have to be repaid for 24 months. As a result, the notes payable should be reported on your balance sheet as the last liability.)
17 You buy more baking equipment for $900 cash.
20 You teach your first baking class and collect $125 cash.
25 You book a second teaching class for December 4 for $150. You receive $30 cash in advance as a down payment.
30 You pay $1,320 for a one-year insurance policy that will expire on December 1, 2016.
Instructions -
Name your corporation and prepare journal entries to record the November transactions.
Post the journal entries to general ledger accounts.
Prepare a trial balance at November 30.