On 1 December Northlake Nordic Centre Inc. issues common shares to a new investor for $50,000 cash. The shares have no par value. Record the issue.

Answer

Dr Cash 50000; Cr Common Shares 50000

Accounts - Cash - Common Shares - Retained Earnings - Notes Payable - Service Revenue **Cash** (asset up — debit) and **Common Shares** (equity up — credit), the whole proceeds, because Canadian shares carry no par value. **Retained Earnings** is the trap: it is earned equity, and a share issue earns nothing. **Service Revenue** is wrong because shareholders are not customers. Notes Payable is a loan, not an ownership interest.

Hermanson Vol 1 ch 2 (a fifteen-transaction month, adapted shape); Dauderis & Annand §2.2 (concept map C7, first half)