1. Kevin deposits $500 of his own money into the companys checking account.

2. Kevin signs a note payable in the amount of $1,000 from Neighborhood Bank. The note is due in one year.

3. KKCDK (Kevins Kool CD Kopies) purchases a CD duplicator (a piece of equipment), which can copy seven CDs at one time. The cost is $1,300 and he pays cash.

4. KKCDK purchases 500 blank CDs for $150 on account.

5. KKCDK pays $20 cash for flyers to advertise.

6. KKCDK quickly catches on with the student groups on campus. KKCDK sells 400 CDs to various groups for $0.80 per CD. KKCDK receives cash payment for 300 of the CDs and the student groups owe for the other 100 CDs.

7. KKCDK pays $100 on its accounts payable.

8. KKCDK receives $40 in advance to copy 50 CDs for a student group. He will not begin work on the project until February.

9. KKCDK incurs $40 in tax expense. The taxes will be paid in February.

10. Kevins roommate, Mark, helps with the CD copying and delivering. KKCDK pays Mark a salary of $50 per month. Mark will get his first check on February 1.

11. KKCDK incurs $10 in interest expense. The interest will be paid with the note.

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F. Prepare a financial statement