Nov 8   Mrs L cashes her U.S. Savings Bonds and receives $520, which she deposits in her personal bank account.
Nov 8   She opens a bank account under the name “Cookies" and transfers $500 from her personal account to the new account.
Nov 11   Mrs L pays $65 for advertising.
Nov 13   She buys baking supplies, such as flour, sugar, butter, and chocolate chips, for $125 cash. (Hint: Use Supplies account.)
Nov 14   Mrs L 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. Mrs L 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.
Nov 16   Mrs L realizes that her initial cash investment is not enough. Her grandmother lends her $2,000 cash, for which Mrs L signs a note payable in the name of the business. Mrs L 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.)
Nov 17   She buys more baking equipment for $900 cash.
Nov 20   She teaches her first class and collects $125 cash.
Nov 25   Mrs L books a second class for December 4 for $150. She receives $30 cash in advance as a down payment.
Nov 30   Mrs L pays $1,320 for a one-year insurance policy that will expire on December 1, 2020.

Part 2
There is a continuation. By end of November, Mrs L puts together the following additional information:
a.   A count reveals that $35 of baking supplies were used during November.
b.   Mrs L estimates that all of her baking equipment will have a useful life of 5 years or 60 months. (Assume Mrs L decides to record a full month's worth of depreciation, regardless of when the equipment was obtained by the business.)
c.   Mrs L’s grandmother has decided to charge interest of 6% on the note payable extended on November 16. The loan plus interest is to be repaid in 24 months. (Assume that half a month of interest accrued during November.)
d.   On November 30, a friend of Mrs L asks her to teach a class at the neighborhood school. Mrs L agrees and teaches a group of 35 first-grade students how to make gingerbread cookies. The next day, Mrs L prepares an invoice for $300 and leaves it with the school principal. The principal says that he will pass the invoice along to the head office, and it will be paid sometime in December.
e.   Mrs L receives a utilities bill for $45. The bill is for utilities consumed by Mrs L’s “Cookies" business during November and is due December 15.
Using the trial balance provided, and based on the new information above, do the following:
COOKIES: Trial Balance: November 30, 2019
               Debit           Credit
Cash               $245  
Supplies           125  
Prepaid Insurance       1,320  
Equipment           1,200  
Unearned Service Revenue               $30
Notes Payable                       2,000
Owner's Capital                       800
Service Revenue                   125
Advertising Expense                   65
               $2,955           $2,955
Using the trial balance provided, and based on the new information above, do the following:
Prepare and post the adjusting journal entries.
Prepare an adjusted trial balance.
Using the adjusted trial balance, calculate Cookies' net income or net loss for the month of November 2019.

Part 3
Mrs L had a very busy December.
At the end of the month, after journalizing and posting the December transactions and adjusting entries, Mrs L prepared the adjusted trial balance seen here.
Adjusted Trial Balance December 31, 2019
Debit               Credit
Cash $1,180  
Accounts Receivable 875  
Supplies 350  
Prepaid Insurance 1,210  
Equipment 1,200  
Accumulated Depreciation-
Equipment $40
Accounts Payable 75
Salaries and Wages Payable 56
Interest Payable 15
Unearned Service Revenue 300
Notes Payable 2,000
Owner's Capital 800
Owner's Drawings       500  
Service Revenue 4,515
Salaries and Wages expense1006  
Utilities Expense 125  
Advertising Expense       165  
Supplies Expense 1,025  
Depreciation Expense   40  
Insurance Expense 110  
Interest Expense 15     
$7,801               $7,801
Using the information in the adjusted trial balance, do the following:
a.   Prepare income statement and an owner's equity statement for the 2 months ended December 31, 2019, and a classified balance sheet as at December 31, 2019.
The note payable has a stated interest rate of 6%, and the principal and interest are due on November 16, 2021.
b.   Mrs L has decided that her year-end will be December 31, 2019. Prepare and post-closing entries as of December 31, 2019.
c.   Prepare a post-closing trial balance.
Income statement. Below is format
Cookies                              
For the Month Ended (fill in date)
Owner's Equity Statement. Below is format
Cookies              
For the Month Ended (fill in date)  
Balance Sheet   . Below is format          
Date              
   Assets          
Liabilities & Owner's Equity  
Prepare journal entries. Below is format
General Journal
Date   Account title & Explanation   Debit       Credit
Post Closing Trial Balance. Below is format
Date:
Account           Debit           Credit