CHAPTER 2
Cookie Creations
(Note: This is a continuation of the Cookie Creations from Chapter 1.)
CC2 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 2016, 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.
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.
Instructions
(a) Prepare journal entries to record the November transactions.
(b) Post the journal entries to general ledger accounts.
(c) Prepare a trial balance at November 30.