Question

Kania, D.D.S., opened a dental practice on January 1st. During the first month of operations the following transactions occurred. 1. Performed services for patients during the month. At January 31, $375 of such services were performed but not yet billed. 2. Utility expenses incurred but not paid prior to January 31 totaled $500. 3. Purchased dental equipment on January 1 for $40,000, paying $10,000 in cash and signing a $30,000, 3-year note payable. The equipment depreciates $200 per month. Interest incurred but unpaid at the end of January was $250. 4. Purchased a one-year malpractice insurance policy on January 1 for $6,000. 5. On January 1, recorded the purchase of $800 of dental supplies. On January 31, determined that $550 of those supplies were used during the month. Required: Prepare the adjusting journal entries on January 31. [Note: In this homework problem, be sure to prepare adjusting journal entries (i.e., in journal entry form) and not simply T-accounts --- even though you might use T-accounts to help you analyze some of the adjusting entries.]

Answer 1

Transaction	General Journal	Debit	Credit
1	Accounts receivable	$375
	Service revenue		$375
	( To record service revenue)
2	Utilities expense	$500
	Accounts payable		$500
	( To record utilities expense)
3	Depreciation expense	$200
	Accumulated depreciation - equipment		$200
	( To record depreciation expense)
	Interest expense	$250
	Interest payable		$250
	( To record interest expense)
4	Insurance expense	$500
	Prepaid insurance		$500
	( To record insurance expense)
5	Supplies expense	$550
	Supplies		$550
	( To record supplies)

Insurance expense for 1 month = 6,000 x 1/12

= $500

Kindly comment if you need further assistance.

Thanks‼!