Jim Haught, D.D.S., opened an incorporated dental practice on January 1, 2014. D

Question

Jim Haught, D.D.S., opened an incorporated dental practice on January 1, 2014. During the first month of operations, the following transactions occurred.

Purchased $2,170 of dental supplies (recorded as increase to Supplies). On January 31, determined that $580 of supplies were on hand.

1. Performed services for patients who had dental plan insurance. At January 31, $940 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 $610. 3. Purchased dental equipment on January 1 for $80,400, paying $27,420 in cash and signing a $52,980, 3-year note payable (interest is paid each December 31). The equipment depreciates $640 per month. Interest is $690 per month. 4. Purchased a 1-year malpractice insurance policy on January 1 for $24,000. 5.

Purchased $2,170 of dental supplies (recorded as increase to Supplies). On January 31, determined that $580 of supplies were on hand.

Prepare the adjusting entries on January 31. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.) No. Account Titles and Explanation Debit Credit 2. 3 (To record depreciation expense) (To record interest expense) 4 5.

Explanation / Answer

Journal Accounts receivable 940 To Service revenue 940 Utility expense 610 To utility expenses payable 610 Dental equipment 80400 To cash 27420 To notes payable 52980 Depreciation 640 To Dental Equipment 640 Interest expense 690 To interest payable 690 dental supplies 2170    To cash   2170 Insurance premium 24000    To cash 24000

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