"Small business entrepreneur Elizabeth O$$Brien decides to start up her own business to provide

cooking classes to the local community. Taste Buds Kitchen not only provides cooking classes

but also provides sells pre$-$packaged ingredients called $$Taste Buds at Home$$ that customers

can purchase to recreate gourmet meals at home. In November $2023,$ Elizabeth incorporates

her business Taste Buds Kitchen, Inc. The following events occur in November and December,

the first two months of operations:

November $2023$

November $8$ Elizabeth cashes in her U$.$S$.$ Savings Bond and receives $$520,$ which she

deposits in her personal bank account.

November $8$ Elizabeth purchases $$500$ of common stock in Taste Buds Kitchen.

November $14$ Taste Buds Kitchen pays $$125$ to purchase baking supplies, such as flour,

sugar, butter, and chocolate chips $($Account: Supplies$).$

November $15$ Elizabeth starts to gather some equipment to take with her when

teaching the cooking classes. She has an excellent top$-$of$-$the$-$line food

processor and mixer that originally cost her $$550.$ Elizabeth decides to

start using it only in her business. She estimates that the equipment is

currently worth $$300,$ and she transfers the equipment into the business

in exchange for additional common stock.

November $16$ The company needs more cash to sustain its operations. Elizabeth

decides to borrow from EG credit union, and the bank lends the company

$$2,000$ cash, in exchange for a two$-$year, $9\%$ note payable. Interest and

the principal are payable at maturity.

November $17$ Taste Buds Kitchen pays $$900$ for additional baking equipment.

November $18$ Elizabeth schedules her first class for November $29.$ She will receive

$$100$ on the date of the class.

November $25$ Elizabeth books a second class for December $5$ for $$150.$ She receives a

$$60$ cash down payment, in advance.

$($continued on next page$)$

November $30$ Elizabeth$$s brother develops a website for Taste Buds Kitchen, Inc., and

the company will use the site for advertising. He charges the company

$$600$ for his work, payable at the end of December. $($Because the website

is expected to have a useful life of two years before upgrades are needed,

it should be treated as an asset called Website$).$

November $30$ Taste Buds Kitchen pays $$1,200$ for a one$-$year insurance policy.

November $30$ Elizabeth teaches a group of elementary school students how to make

Santa Clause cookies. At the end of the class, Elizabeth leaves an invoice

for $$300$ with the school principal. The principal says that he will pass it

along to the business office, and it will be paid sometime in December.

November $30$ Elizabeth receives a $$50$ invoice for use of her cell phone. She uses the

cell phone exclusively for Taste Buds Kitchen business. The invoice is for

services provided in November, and payment is due on December $15."$ "December $2023$

December $1$ Elizabeth hires an assistant at an hourly wage of $$8$ per hour to help with

cookie making and some administrative duties.

December $5$ Elizabeth teaches the class that was booked on November $25.$ The

balance outstanding is received.

December $8$ Taste Buds Kitchen receives a check for the amount due from the

neighborhood school for the class given on November $30.$

December $9$ Taste Buds Kitchen receives $$750$ in advance from the local school board

for fiveclasses that the company will give during December and

January.

December $15$ Pays the cell phone invoice outstanding at November $30.$

December $16$ Issues a check to Elizabeth$$s brother for the amount owed for the design

of the website.

December $19$ Receives a deposit of $$60$ on a cookie$-$baking class scheduled for early

January.

December $23$ Additional revenue during the month for cookie$-$making classes amounts

to $$4,000($Elizabeth has not had time to account for each class

individually$).$ $$3,000$ in cash has been collected and $$1,000$ is still

outstanding. $($This is in addition to December $5$ and December $9$

transactions$).$

December $23$ Issues a check to Elizabeth$$s assistant for $$800.$ Her assistant worked

approximately $100$ hours from the time in which she was hired until

December $23.$

December $28$ Taste Buds Kitchen, Inc. pays a dividend of $$500$ to the common

shareholder $($Elizabeth$).",$ "Required:

$1.$ Prepare journal entries to record the November and December transactions for Taste

Buds Kitchen, Inc."