Exercise 4-10 im Haught, D.D.S., opened an incorporated dental practice on Janua
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Question
Exercise 4-10 im Haught, D.D.S., opened an incorporated dental practice on January 1, 2014. During the first month of operations, the following transactions occurred 1. Performed services for patients who had dental plan insurance. At January 31, $900 of such services was completed but not yet billed to the insurance 2. Utility expenses incurred but not paid prior to January 31 totaled $600 companies 3. Purchased dental equipment on January 1 for $85,680, paying $28,020 in cash and signing a $57,660, 3-year note payable (interest is paid each December 31). The equipment depreciates $540 per month. Interest is $460 per month 4. Purchased a 1-year malpractice insurance policy on January 1 for $36,000 5. Purchased $2,550 of dental supplies (recorded as increase to Supplies). On January 31, determined that $700 of supplies were on hand Prepare the adjusting entries on January 31. (Credit account titles are automaically indented when the amount is entered. Do not indent manually.)Explanation / Answer
Solution. journal Entries
1.
Unearned Revenue Dr. 900
Revenue Cr. 900
( Adjustment entry for unearned revenue )
2.
Utility Expense Dr. 600
Accrued Liabilities-Utilities Cr. 600
( To record utility expense accrued )
3.
Depreciation Dr. 540
Equipment Cr. 540
( To record depreciation )
Interest Expense Dr. 460
Discount on note payable Cr. 460
( To record interest expense )
4.
Prepaid insurance Dr. 36,000
Cash Cr. 36,000
( Prepaid one year insurance policy )
Insurance Expense Dr. 3,000
Prepaid insurance Expense Cr. 3,000
( To adjust prepaid insurance for one month 36,000/12 = 3,000 )
5.
Purchase Dr. 2,550
Cash Cr. 2,550
( To record Purchase )
Supplies in hand Dr. 700
Note payable Cr. 700
( To record supplies in hand )
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