Hi info809
You would have to first activate Locations, if you have't already. Select the cog/gear icon in the top right hand corner of the screen > account and settings > advanced > Categories > select/activate Locations > Save.
You will then have to set up the locations, you can do this within the transaction by selecting the drop down menu in the location field and select add new or select the cog/gear icon in the top right hand corner of the screen > lists > Locations > New.
You will then be able to select the location you have created within the transaction you are creating.