Evan Watts opened a dental practice on January 1, 2017. During the first month o

Question

Evan Watts opened a dental practice on January 1, 2017. During the first month of operations, the following transactions occurred.

1. Watts performed services for patients totalling $2,170. These services have not yet been recorded. 2. Utility expenses incurred but not paid prior to January 31 totalled $390. 3. Purchased dental equipment on January 1 for $76,000, paying $18,400 in cash and signing a $57,600, three-year note payable. The equipment depreciates $400 per month. Interest is $490 per month. 4. Purchased a one-year malpractice insurance policy on January 1 for $11,400. 5. Purchased $2,440 of dental supplies. On January 31, determined that $950 of supplies were on hand.

Explanation / Answer

journal Entries

date

explanation

debit

credit

1-

cash

2170

service fees revenue

2170

2-

utility expense

utility bill payable

3-

equipment

76000

cash

18400

notes payable

57600

4-

depreciation expense

400

accumulated depreciation

400

5-

interest expense

490

interest payable

490

6-

prepaid insurance expense

11400

cash

11400

7-

interest expense

950

prepaid insurance expense

950

8-

supplies

2440

cash

2440

9-

supplies expense

1490

supplies

1490

journal Entries

date

explanation

debit

credit

1-

cash

2170

service fees revenue

2170

2-

utility expense

utility bill payable

3-

equipment

76000

cash

18400

notes payable

57600

4-

depreciation expense

400

accumulated depreciation

400

5-

interest expense

490

interest payable

490

6-

prepaid insurance expense

11400

cash

11400

7-

interest expense

950

prepaid insurance expense

950

8-

supplies

2440

cash

2440

9-

supplies expense

1490

supplies

1490

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