Question

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, 2017. Received $80,000 cash when issuing 8,000 new shares. Purchased some land by paying $2,000 cash and signing a note payable for $7,000 due in 2017. Hired a new esthetician for a salary of $1,000 a month, starting next month. Bought $1,000 in soaps and aromatherapy supplies for the spa on credit. NGS purchased a company car for $18,000 cash (list price of $21,000) to assist in running errands for the business. Nicole sold 100 of her own personal shares to Raea Gooding for $300. Paid $350 of the amount owed in (d). Required: 1. Prepare journal entries for each transaction. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Answer 1

1) Journal Entries
Account Titles and Explanation	Debit	Credit
Cash	$80,000
Nicole's Capital		$80,000
(To record the cash invested into the business)
Land ($2,000 + $7,000)	$9,000
Cash		$2,000
Notes Payable		$7,000
(To record the purchase of land)
No journal entry
It is not a financial transaction so it is not recorded.
Supplies	$1,000
Accounts Payable		$1,000
(To record the purchase of supplies on account)
Car or Truck	$18,000
Cash		$18,000
(To record the purchase of car)
Cash	$300
Raea Gooding's Capital		$300
(To record the cash invested into the business)
Accounts Payable	$350
Cash		$350
(To record the payment of accounts payable)