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Answer 1

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Louis Dixon, a dentist, resigned from his position with a large dental group in order to begin his

own pediatric dental practice. The practice was organized as a sole proprietorship, called Louis

Dixon Pediatric Dentistry. The business transactions during September while the new venture was

being organized are listed below.

Sept. 1

Sept. 10

Dixon opened a bank account in the name of the business by depositing $50,000 cash,

which he had saved over a number of years.

Purchased a small office building located on a large lot for a total price of $182,400,

of which $106,000 was applicable to the land and $76,400 to the building. A cash

payment of $36,500 was made and a note payable was issued for the balance of the

purchase price.