Q:

Where should I be creating the entity objects?

I have an entity class and an entity DAO class. 
Should it be the responsibility of the DAO class to create instances of the entity class, or should there be an entity creator/manager class that uses the DAO class only to get the data from the database to create the entity class. 
Thanks,
Chris

A:

It should be the responsibility of the DAO to load a persistent object from the datastore and returning a transient instance. Why add another layer of abstraction here?
For creating new Entities, a Factory (or Assembler) might be involved. However, usually this is only justified when entity creation is complex enough. A simple constructor fits the bill just fine in most cases.

