Question

Marigold Corp., opened an incorporated dental practice on January 1, 2022. During the first month of operations, the following transactions occurred. 1. Performed services for patients who had dental plan insurance. At January 31, $890 of such services was completed but not yet billed to the insurance companies. 2. Utility expenses incurred but not paid prior to January 31 totaled $670. 3. Purchased dental equipment on January 1 for $85,500, paying $29,250 in cash and signing a $56,250, 3-year note payable interest is paid each December 31). The equipment depreciates $620 per month. Interest is $470 per month. 4. Purchased a 1-year malpractice insurance policy on January 1 for $24,000. 5. Purchased $2,650 of dental supplies (recorded as increase to Supplies). On January 31, determined that $680 of supplies were on hand. Prepare the adjusting entries on January 31. Account titles are Accumulated Depreciation Equipment, Depreciation Expense, Service Revenue, Accounts Receivable, Insurance Expense, Interest Expense, Interest Payable, Prepaid Insurance, Supplies, Supplies Expense, Utilities Expense, and Accounts Payable. (If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.)

Answer 1

Adjusting entries

No	Date	Account and explanation	Debit	Credit
1	Jan 31	Account receivable	890
		Service revenue		890
2	Jan 31	Utilities expense	670
		Account payable		670
3	Jan 31	Depreciation expense	620
		Accumulated depreciation-equipment		620
		(To record depreciation)
		Interest expense	470
		Interest payable		470
		(To record interest expense)
4	Jan 31	Insurance expense (24000/12)	2000
		Prepaid insurance		2000
5	Jan 31	Supplies expense (2650-680)	1970
		Supplies		1970