E3-8 Meghan Lindh, D.D.S., opened a dental practice on January 1, 2017. During t
ID: 2333229 • Letter: E
Question
E3-8 Meghan Lindh, D.D.S., opened a dental practice on January 1, 2017. During the first month of operations, the following transactions occurred. Performed services for patients who had dental plan insurance. At January 31, $875 of such services were performed but not yet recorded. Utility expenses incurred but not paid prior to January 31 totaled $650. 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. Purchased a one-year malpractice insurance policy on January 1 for $24,000. Purchased $1,600 of dental supplies. On January 31, determined that $400 of supplies were on hand. Instructions 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 Utilities Payable. Prepare adjusting entries. E3-8 Meghan Lindh, D.D.S., opened a dental practice on January 1, 2017. During the first month of operations, the following transactions occurred. Performed services for patients who had dental plan insurance. At January 31, $875 of such services were performed but not yet recorded. Utility expenses incurred but not paid prior to January 31 totaled $650. 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. Purchased a one-year malpractice insurance policy on January 1 for $24,000. Purchased $1,600 of dental supplies. On January 31, determined that $400 of supplies were on hand. Instructions 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 Utilities Payable. Prepare adjusting entries. Performed services for patients who had dental plan insurance. At January 31, $875 of such services were performed but not yet recorded. Utility expenses incurred but not paid prior to January 31 totaled $650. 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. Purchased a one-year malpractice insurance policy on January 1 for $24,000. Purchased $1,600 of dental supplies. On January 31, determined that $400 of supplies were on hand. Instructions 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 Utilities Payable. Prepare adjusting entries.Explanation / Answer
Answer
Adjusting Entry no.
Accounts title
Debit
Credit
1
Accounts receivables
$ 875.00
Service revenue
$ 875.00
(revenue earned now recorded)
2
Utilities expense
$ 650.00
Utilities Payable
$ 650.00
(Amount due to be paid)
3
Depreciation expense
$ 400.00
Accumulated Depreciation - Equipment
$ 400.00
(depreciation recorded)
4
Interest expense
$ 500.00
Interest payable
$ 500.00
(Interest accrued to be paid)
5
Insurance Expense [1 month insurance = 24000/12]
$ 2,000.00
Prepaid Insurance
$ 2,000.00
(1 month insurance expired)
6
Supplies expense
$ 1,200.00
Supplies
$ 1,200.00
(Supplies consumed = 1600 - 400)
Adjusting Entry no.
Accounts title
Debit
Credit
1
Accounts receivables
$ 875.00
Service revenue
$ 875.00
(revenue earned now recorded)
2
Utilities expense
$ 650.00
Utilities Payable
$ 650.00
(Amount due to be paid)
3
Depreciation expense
$ 400.00
Accumulated Depreciation - Equipment
$ 400.00
(depreciation recorded)
4
Interest expense
$ 500.00
Interest payable
$ 500.00
(Interest accrued to be paid)
5
Insurance Expense [1 month insurance = 24000/12]
$ 2,000.00
Prepaid Insurance
$ 2,000.00
(1 month insurance expired)
6
Supplies expense
$ 1,200.00
Supplies
$ 1,200.00
(Supplies consumed = 1600 - 400)
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