Question

1 Novak Corp, opened an incorporated dental practice on January 1, 2022. During the first month of operations, the following transactions occurred Performed services for patients who had dental plan insurance. At January 31, $930 of such services was completed but not yet billed to the insurance companies. Utility expenses incurred but not paid prior to January 31 totaled $520. Purchased dental equipment on January 1 for $87,600, paying $28,250 in cash and signing a $59,350, 3-year note payable (interest is paid each December 31). The equipment depreciates $540 per month. Interest is $670 per month. 4. Purchased a 1-year malpractice insurance policy on January 1 for $24,000. 5. Purchased $2,320 of dental supplies (recorded as increase to Supplies). On January 31, determined that $610 of supplies were on hand. 2. 3. 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

Solution:

No	Date	Accounts titles and Explanation	Debit	Credit
1	Jan-31	Accounts receivable a/c Dr	930
		To service revenue a/c		930
2	Jan-31	Utilities expense a/c Dr	520
		To accounts payable a/c		520
3	Jan-31	Depreciation expense a/c Dr	540
		To accumulated depreciation - equipment a/c		540
		(To record depreciation expense)
3	Jan-31	Interest expense a/c Dr	670
		To interest payable a/c		670
		(To record interest expense)
4	Jan-31	Insurance expense a/c Dr (24000 / 12)	2000
		To prepaid insurance a/c		2000
5	Jan-31	Supplies expense a/c Dr (2320 - 610)	1,710
		To supplies a/c		1,710