Question

- E3-6(103) (Adjusting Entries) Karen Weller, D.D.S., opened a dental practice on January 1, 2017. During the first month of operations, the following transactions occurred. Prepare the adjusting entries on January 31. 1. Performed services for patients who had dental plan insurance. At January 31, $750 of such services was performed but not yet billed to the insurance companies 2. Utility expenses incurred but not paid prior to January 31 totaled $520. 3. Purchased dental equipment on January 1 for $80,000, paying $20,000 in cash and signing a $60,000, 3-year note payable. The equipment depreciates $400 per month. Interest is $500 per month. 4. Purchased a one-year malpractice insurance policy on January 1 for $12,000. 5. Purchased $1,600 of dental supplies. On January 31, determined that $500 of supplies were on hand.

Answer 1

Adjusting Entries
Events	Particulars			Debit	Credit
1)	Accounts Receivable			$    750.00
	To Service Revenue				$    750.00
2)	Utility Expense			$    520.00
	To Accounts Payable				$    520.00
3.a)	Depreciation Expense			$    400.00
	To Accumulated Depreciation				$    400.00
3.b)	Interest Expense			$    500.00
	To Interest Payable				$    500.00
4)	Insurance Expense			$ 1,000.00
	To Prepaid Insurance				$ 1,000.00
	($ 12000 x 1/12)
5)	Supplies Expense			$ 1,100.00
	To Supplies				$ 1,100.00
	($ 1600 - $ 500)