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

Question

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

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

1. Performed services for patients who had dental plan insurance. At January 31, $780 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 $540. 3. Purchased dental equipment on January 1 for $87,590, paying $29,890 in cash and signing a $57,700, 3-year note payable (interest is paid each December 31). The equipment depreciates $590 per month. Interest is $620 per month. 4. Purchased a 1-year malpractice insurance policy on January 1 for $48,000. 5. Purchased $1,910 of dental supplies (recorded as increase to Supplies). On January 31, determined that $610 of supplies were on hand.

Explanation / Answer

Here are the entries

Sr. No Account Title and Explanation Debit Credit 1 Insurance company $780 To Service Income $780 2 Utility expenses $540 To Outstanding Expenses $540 3 Dental Equipment $87,590 To Cash $29,890 To Note Payable $57,700 Depreciation $590 To Dental Equipment $590 Interest Expense $620 To Cash $620 4 Prepaid Insurance $48,000 To Cash $48,000 5 Dental Supplies $1,910 To Cash $1,910

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